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Value-Added Tax Act, 1991 (Act 89 of 1991)

by , 19 August 2014
Value-Added Tax Act, 1991 (Act 89 of 1991) as per Government Gazette

 
Value-Added Tax Act, 1991 ()
 
First published 2011
 
Second publication 2013
 
Fleet Street Publications
 
Private Bag X16, Northriding, 2162. Northlands Deco Park,
Office S5, 2nd Floor, Northlands Corner, Newmarket Street, Northriding, 2169. Tel: 0861 114 338, Fax: 0861 114 717, www.practicalvatlooseleaf.co.za

This Act is reproduced with permission from the Government Printing Works
 
Copyright 2013, Fleet Street Publications (Pty) Ltd.
 
No part of this publication may be reproduced or transmitted in any form or by means electronic or mechanical, including recording, photocopying, or via a computerised or electric storage or retrieval system without permission granted in writing from the publisher. The information contained herein is obtained from sources believed to be reliable, but its accuracy cannot be guaranteed.
 
No action or inaction should be taken based solely on the contents of this publication; instead, readers should consult appropriate tax professionals on any matter relating to tax. The information and opinions provided in this publication are believed to be accurate and sound, based on the best judgement available to the authors. The publisher is not
responsible for errors or omissions. Specific advice should be obtained in considering the tax effects of particular transactions.



Index
 
Chapter
 
 
Page
1. Definitions 3
2. Financial services 29
3. Determination of "open market value" 33
I. Administration 35
II. Value-Added Tax 41
III. Registration 153
IV. Returns, Payments and Assessments 163
V. Objections and Appeals 181
VI. Payment, Recovery and Refund Tax 189
VII. Representative Vendors 211
VIII. Special Provisions 217
IX. Compliance 231
X. Miscellaneous 253
Schedules  
Schedule 1:
Exemption: Certain Goods Imported into
 
the Republic                                                              285
Schedule 2 - Part A
Zero Rate: Supply of Goods Used or Consumed for Agricultural, Pastoral or other Farming
Purposes                                                                   325
Schedule 2 - Part B
Zero Rate: Supply of goods consisting of
certain foodstuffs                                                       329
Schedule 3: Laws Repealed                                      333
Regulations                                                                      335

Key
 
Use this key to interpret the referencing system on the top right hand side of each page.
 
s:              section
 
ss:            two sections sch:          schedules
GNN:       Government Notice Number lNT Note: lnterpretation notes

Introduction
 
This publication reproduced the Value-Added Tax Act (Act 89 of
1991) as amended up to December 2012.
 
Words used in the Act, which are defined in Section 1, have their defined meaning.
 
Other words have the ordinary dictionary meaning, as do words used in the definition - e.g. the word "enterprise" is defined in the Act as "any enterprise or activity carried on by any person…". Within this definition, it means "A business, venture or undertaking with the object of making a profit" while in the regular dictionary, it means "a specific deed, action, function or sphere of action, e.g.  social activities".
 
Another example is the word "exported" which only in relation to a sale or installment credit agreement means "consigned to or delivered to the purchaser in an export country". In all other circumstances, "exported" has the regular dictionary meaning of "taken out of the country".

 
 1. Definitions
 
In this Act, unless the context otherwise indicates-
 
"adjusted cost" means the cost of any goods or services where tax has been charged or would have been charged if section 7 of this Act had been applicable prior to the commencement date, in respect of the supply of goods and services or if the vendor was or would have been entitled to an input tax deduction in terms of paragraph (b) of the definition of 'input tax';
 
"ancillary transport services" means stevedoring services, lashing and securing services, cargo inspection services, preparation of customs documentation, container handling services and storage of transported goods or goods to be transported;
 
"association not for gain" means-
 
a)   any religious institution of a public character; or
 
b)   any other society, association or organization, whether incorporated or not (other than an educational institution in respect of which the provisions of paragraph (c) apply), which-
 
i)    is carried on otherwise than for the purposes of profit or gain to any proprietor, member or shareholder; and
 
ii)   is, in terms of its memorandum, articles of association, written rules or other document constituting or governing the activities of that society, association or organization-
 
aa) required to utilize any property or income solely in the furtherance of its aims and objects; and
 
bb) prohibited from transferring any portion thereof directly or indirectly in any manner whatsoever so as to profit any person other than by way of the payment in good faith of reasonable remuneration to any officer or employee of the society, association or organization for any services actually rendered to such society,
association or organization; and
 
cc) upon the winding-up or liquidation of such society, association or organization, obliged to give or transfer its assets remaining after the satisfaction of its liabilities to some other society, association or organization with objects similar to those of the said society, association or organization; or
 
c)   any educational institution of a public character, whether incorporated or not, which-
 
i)    is carried on otherwise than for the purposes of profit or gain to any proprietor, member or shareholder; and
 
ii)   is, in terms of its memorandum, articles of association, written rules or other document consisting of governing the activities of that educational institution-
 
aa) required to utilise any property or income solely in the furtherance of its aims and objects; and
 
bb) prohibited from transferring any portion thereof directly or indirectly in any manner whatsoever so as to profit any person other than by way of the payment in good faith of reasonable remuneration to any officer or employee of the educational institution for any services actually rendered to such institution;
 
"biometrical information" means the biological data to authenticate the identity of a natural person, and includes-
 
a)   facial recognition;
 
b)   fingerprint recognition; c)   vocal recognition; and d)   iris or retina recognition
"business day" means any day which is not a Saturday, Sunday or public holiday;

"cash value" in relation to the supply of goods supplied under an instalment credit agreement, means-
 
a)   where the seller or lessor is a banker or financier, an amount equal to or exceeding the sum of the cost to the banker or financier of the goods, including any cost of erection, construction, assembly or installation of the goods borne by
the banker or financier and the tax leviable under section 7(1)(a)
in respect of such supply by the banker or financier; or
 
b)   where the seller or lessor is a dealer, an amount equal to or exceeding the price (including tax) at which the goods are normally sold by him for cash or may normally be acquired from him for cash (including tax) and any charge (including tax) made by the seller or lessor in respect of the erection, construction, assembly or installation of the goods if such charge is financed by the seller or lessor under the instalment credit agreement;
 
"Chief Executive Officer" means the Director-General: South
African Revenue Service;
 
"close corporation" means a close corporation within the meaning of the Close Corporations Act, 1984 (Act No. 69 of 1984);
 
"commencement date" means 30 September, 1991;
 
"commercial accommodation" means
 
a)   lodging or board and lodging, together with domestic goods and services, in any house, flat, apartment, room, hotel, motel, inn, guesthouse, boarding house, residential establishment, holiday accomodation unit, chalet, tent, caravan, camping site, houseboat or similar establishment, which is regularly or systematically supplied and where the total annual receipts from the supply thereof exceeds R60 000 in a period of 12 months or is reasonably expected to exceed that amount in a period of 12 months, but excluding a dwelling supplied in
terms of an agreement for the letting and hiring thereof;

b)   lodging or board and lodging in a home for the aged, children, physically or mentally handicapped persons; and
 
c)   lodging or board and lodging in a hospice;
 
"Commissioner" means the Commissioner for Inland Revenue;
 
"company" means a company as defined in section 1 of the
Income Tax Act;
 
"connected persons" means-
 
a)   any natural person (including the estate of a natural person if such person is deceased or insolvent) and-
 
i)    any relative of that natural person (being a relative as defined in section 1 of the Income Tax Act) or the estate of any such relative if the relative is deceased or insolvent; or
 
ii)   any trust fund in respect of which any such relative or such estate of such relative is or may be a beneficiary; or
 
b)   any trust fund and any person who is or may be a beneficiary in respect of that fund; or
 
c)   any partnership or close corporation and- i)               any member thereof; or
ii)   any other person where that person and a member of such partnership or close corporation, as the case may be, are connected persons in terms of this definition; or
 
d)   any company (other than a close corporation) and-
 
i)    any person (other than a company) where that person, his spouse or minor child or any trust fund in respect of which that person, his spouse or minor child is or may be a beneficiary, is separately interested or two or more of them are in the aggregate interested in 1O per cent or more of the company's paid-up capital or 1O per cent or more of the company's equity share capital (as defined in section 1 of

the Income Tax Act) or 1O per cent or more of the voting tights of the shareholders of the company, whether directly or indirectly; or
 
ii)   any other company the shareholders in which (being shareholders as contemplated in the definition of "shareholder" in section 1 of the Income Tax Act) are substantially the same persons as the shareholders in the first mentioned company, or which is controlled by the
same persons who control the first-mentioned company; or
 
iii)  any person where that person and the person referred to in subparagraph (i) or his spouse or minor child or the trust fund referred to in that subparagraph or the other company referred to in subparagraph (ii) are connected persons in terms of this definition; or
 
e)   any separate enterprise, branch or division of a vendor which is separately registered as a vendor under the provisions of section 5O and any other such enterprise, branch or division of the vendor, or
 
f)    any branch, division or separate enterprise of an association not for gain which is deemed by subsection (5) of section 23 to be a separate person for the purposes of that section and any other branch, division or separate enterprise of that association, whether or not such other branch, division or separate enterprise is a vendor, or
 
g)   any person and any superannuation scheme referred to in section 2(2)(vii), the members of which are mainly the employees or office holders or former employees or office holders of that person;
 
"consideration" in relation to the supply of goods or services to any person, includes any payment made or to be made (including any deposit on any returnable container and tax), whether in money or otherwise, or any act or forbearance, whether or not voluntary, in respect of, in response to, or for the inducement of, the supply of
any goods or services, whether by that person or by any other person, but does not include any payment made by any person as a donation to any association not for gain;
 
Provided that a deposit (other than a deposit on a returnable container), whether refundable or not, given in respect of a supply of goods or services shall not be considered as payment made for the supply unless and until the supplier applies the deposit as consideration for the supply or such deposit is forfeited;
 
"consideration in money" includes consideration expressed as an amount of money,
 
"controller" has the meaning assigned thereto in section 1 of the
Customs and Excise Act;
 
"Customs and Excise Act" means the Customs and Excise Act,
1964 (Act No. 91 of 1964);
 
"customs controlled area" has the meaning assigned thereto in section 21A of the Customs and Excise Act;
 
"customs controlled area enterprise" has the meaning assigned thereto in section 21A of the Customs and Excise Act, 1964;
 
"designated entity" means a vendor-
 
i)    to the extent that its supplies of goods and services of an activity carried on by that vendor are in terms of (b)(i) of the definition of 'enterprise' treated as supplies made in the course or furtherance of an enterprise;
 
ii)   which is a major public entity, national government business enterprise or provincial government business enterprise listed in Schedule 2 or Part B or D of Schedule 3 of the Public Finance Management Act, 1999 (Act No.1 of 1999), respectively;
 
iii)  which is a party to a "Public Partnership Agreement" as defined in Regulation 16 of the Treasury Regulations issued in terms of section 76 of the Public Finance Management Act,

1999 (Act No. 1 of 1999), to the extent that that party supplies goods or services in terms of that Agreement to the "institution" defined in that Regulation;
 
iv)  which is a welfare organisation;
 
v)   which is a municipal entity as defined in section 1 of the Local
Government: Municipal Systems Act, 2000 (Act No. 32 of
2000);or
 
vi)  which has powers similar to those of any water board listed in
Part B of Schedule 3 of the Public Finance Management Act,
1999 (Act No. 1 of 1999), which would have complied with the definition of 'local authority' in section 1 prior to the deletion of that definition on 1 July 2006;
 
"domestic goods and services" means goods and services provided in any enterprise supplying commercial accommodation, including-
 
a)   cleaning and maintenance;
 
b)   electricity, gas, air conditioning or heating;
 
c)   a telephone, television set, radio or other similar article;
 
d)   furniture and other fittings;
 
e)   meals;
 
f)    laundry; or
 
g)   nursing services.
 
"donated goods or services" means goods or services which are donated to an association not for gain and are intended for use in the carrying on or carrying out of the purposes of that association;
 
"donation" means a payment whether in money or otherwise voluntarily made to any association not for gain for the carrying on or the carrying out of the purposes of that association and in respect of which no identifiable direct valuable benefit arises or
may arise in the form of a supply of goods or services to the person making that payment or in the form of a supply of goods or services to any other person who is a connected person in relation to the person making the payment, but does not include any payment made by a public authority or a municipality;
 
"dwelling" means, except where it is used in the supply of commercial accommodation, any building, premises, structure or any other place, or any pan thereof. used predominantly as a place of residence or abode of any natural person or which is intended
for use predominantly as a place of residence or abode of any natural person, including fixtures and fittings belonging thereto and enjoyed therewith;
 
"employee organization" means an organization in which a number of employees in any particular undertaking, industry, trade, occupation or profession are associated together for the purpose
of regulating relations between themselves or some of them and their employers or some of their employers or mainly for that purpose, disregarding the provision of sickness, accident or unemployment benefits for the members of the organization or for the widows, children, dependants or nominees of deceased members;
 
"enterprise" means-
 
a)   in the case of any vendor, any enterprise or activity which is carried on continuously or regularly by any person in the Republic or partly in the Republic and in the course or furtherance of which goods or services are supplied to any other person for a consideration, whether or not for profit, including any enterprise or activity carried on in the form of a commercial, financial, industrial, mining, farming, fishing, municipal or professional concern or any other concern of a continuing nature or in the form of an association or club;
 
b)   without limiting the applicability of paragraph (a) in respect of any activity carried on in the form of a commercial, financial, industrial, mining, farming, fishing or professional concern-

i)    the making of supplies by any public authority , of goods or services which the Minister, having regard to the circumstances of the case, is satisfied are of the same kind or are similar to taxable supplies of goods or services
which are or might be made by any person other than such public authority in the course or furtherance of any enterprise, if the Commissioner, in pursuance of a decision of the Minister under this subparagraph, has notified such public authority that its supplies of such goods or services are to be treated as supplies made in the course or furtherance of an enterprise;
 
ii)   the activities of any welfare organization as respects activities referred to in the definition of "welfare organization" in this section;
 
iii)  the activities of any share block company (other than the services in respect of which section 12(f) applies) where such company has applied for registration as a vendor under the provisions of section 23(3) and has been registered as such;
 
iv)  the activities of any person who continuously or regularly supplies telecommunication services to any person who utilises such services in the Republic;
 
v)   the activities of a foreign donor funded project.
 
c)   [deleted by the Amendment of Taxation Laws Act No. 9 of
2006] Provided that-
i)    anything done in connection with the commencement or termination of any such enterprise or activity shall be deemed to be done in the course or furtherance of that enterprise or activity;
 
ii)   any branch or main business of an enterprise permanently situated at premises outside the Republic shall be deemed
 
iii)

to be carried on by a person separate from the vendor, if-
 
aa) the branch or main business can be separately identified; and
 
bb) an independent system of accounting is maintained by the concern in respect of the branch or main business;
 
 
aa) the rendering of services by an employee to his employer in the course of his employment or the rendering of services by the holder of any office in performing the duties of his office, shall not be deemed to be the carrying on of an enterprise to the extent that any amount constituting remuneration as contemplated in the definition of "remuneration" in paragraph 1 of the Fourth Schedule to the Income Tax Act is paid or is payable to such employee or office holder, as the case may be;
 
bb) subparagraph (aa) of this paragraph shall not apply in relation to any employment or office accepted by any person in carrying on any enterprise carried on by him independently of the employer or concern by whom the amount of remuneration is paid or payable;

that contracts of insurance are concluded in the Republic, shall be deemed to be the carrying on of an enterprise;
 
vii) [deleted by the Revenue Laws Amendment Act No. 60 of
2008] ;
 
viii) the making of supplies by a constitutional institution listed in Schedule 1 of the Public Finance Management Act, 1999 (Act No. 1 of 1999), shall be deemed not to be the carrying on of an enterprise;
 
ix)  where a person carries on or intends carrying on an enterprise or activity supplying commercial accommodation as contemplated in paragraph (a) of the
definition of 'commercial accommodation'  in section 1, and the total value of taxable supplies made by that person in the preceding period of 12 months or which it can reasonably be expected that that person will make in a period of 12 months, as the case may be, will not exceed R60 000, shall be deemed not to be the carrying on of an enterprise;
 
x)   where the Minister is satisfied that an activity of the municipal entity as defined in section 1 of the Local Government: Municipal Systems Act, 2000 (Act No. 32 of
2000), is of a regulatory nature and if the Commissioner, in

iv)  any activity carried on by a natural person essentially as a private or recreational pursuit or hobby or any activity carried on by a person other than a natural person which would, if it were carried on by a natural person, be carried on essentially as a private or recreational pursuit or hobby shall not be deemed to be the carrying on of an enterprise;
 
v)   any activity shall to the extent to which it involves the making of exempt supplies not be deemed to be the carrying on of an enterprise;
 
vi)  the activity of underwriting insurance business by
Underwriting Members of Lloyd's of London, to the extent

pursuance of a decision of the Minister, has notified that
'municipal entity' of that decision, the supply of goods or services in respect of that activity by the municipal entity shall be deemed not to be the carrying on of an enterprise;
 
"entertainment" means the provision of any food, beverages, accommodation, entertainment, amusement, recreation or hospitality of any kind by a vendor whether directly or indirectly to anyone in connection with an enterprise carried on by him;
 
"exempt supply" means a supply that is exempt from tax under section 12;
 
"export country" means any country other than the Republic and

 includes any place which is not situated in the Republic: Provided that the President may by notice in the Gazette determine that a specific country or territory shall from a date and to the extent indicated in the notice, be deemed not to be an export country;
 
"exported" in relation to any movable goods supplied by any vendor under a sale or an instalment credit agreement, means-
 
a)   consigned or delivered by the vendor to the recipient at an address in an export country ;
 
b)   delivered by the vendor to the owner or charterer of any foreign-going ship contemplated in paragraph (a) of the definition of "foreign-going ship" or to a foreign-going aircraft when such ship or aircraft is going to a destination in an export country and such goods are for use or consumption in such ship or aircraft, as the case may be; or
 
c)   delivered by the vendor to the owner or charterer of any foreign-going ship contemplated in paragraph (b) of the definition of "foreign-going ship" for use in such ship; or
 
d)   removed from the Republic by the recipient for conveyance to an export country , in accordance with any regulation made in terms of this Act.
 
"financial services" means the activities which are deemed by section 2 to be financial services;
 
"fixed property" means land (together with improvements affixed thereto), any unit as defined in section 1 of the Sectional Titles Act,
1986 (Act No. 95 of 1986), any share in a share block company which confers a right to or an interest in the use of immovable property, and, in relation to a property time-sharing scheme, any time-sharing interest as defined in section 1 of the Property Time- sharing Control Act, 1983 (Act No. 75 of 1983); and any real right in any such land, unit, share or time-sharing interest;
 
"foreign donor funded project" means a project established as a result of an international donor funding agreement to supply goods

or services to beneficiaries, to which the Government of the
Republic is a party, and which
 
i)    is binding on the Republic in terms of section 231(3) of the
Constitution of the Republic of South Africa, 1996; and
 
ii)   provides that the international donor funding must not be subject to tax;
 
"foreign-going aircraft" means any aircraft engaged in the transportation for reward of passengers or goods wholly or mainly on flights between airports in the Republic and airports in export countries or between airports in export countries;
 
"foreign-going ship" means-
 
a)   any ship or other vessel engaged in the transportation for reward of passengers or goods wholly or mainly on voyages between ports in the Republic and ports in export countries or between ports in export countries; or
 
b)   any ship or other vessel registered in an export country where such ship or vessel is utilized for the purposes of a commercial, fishing or other concern conducted outside the Republic by a person who is not a vendor and is not a resident of the Republic;
 
"goods" means corporeal movable things, fixed property any real right in any such thing or fixed property, and electricity, but excluding-
 
a)   money;
 
b)   any right under a mortgage bond or pledge of any such thing or fixed property; and
 
c)   any stamp, form or card which has a money value and has been sold or issued by the State for the payment of any tax or duty levied under any Act of Parliament, except when subsequent to its original sale or issue it is disposed of or imported as a collector's piece or investment article;

 
 
 
 

                        

16                         17


 

 

"grant" means any appropriation, grant in aid, subsidy or contribution transferred, granted or paid to a vendor by a public authority, municipality or constitutional institution listed in Schedule
1 to the Public Finance Management Act, 1999 (Act No. 1 of 1999), but does not include-
 
a)   a payment made for the supply of any goods or services to that public authority or municipality, including all goods or services supplied to a public authority, municipality or constitutional institution listed in Schedule 1 to the Public Finance Management Act, 1999 (Act No. 1 of 1999) in accordance with
a procurement process prescribed-
 
i)    in terms of the Regulations issued under section 76(4)(c) of the Public Finance Management Act, 1999 (Act No. 1 of
1999); or
 
ii)   in terms of Chapter 11 of the Local Government: Municipal Finance Management Act, 2003 (Act No. 56 of 2003), or any other similar process; or
 
b)   a payment contemplated in section 8(23);
 
"imported services" means a supply of services that is made by a supplier who is resident or carries on business outside the
Republic to a recipient who is a resident of the Republic to the extent that such services are utilized or consumed in the Republic otherwise than for the purpose of making taxable supplies;
 
"inbound duty and tax free shop" means an inbound duty and tax free shop as contemplated in the Customs and Excise Act;
 
"Income Tax Act" means the Income Tax Act, 1962 (Act No. 58 of
1962);
 
"Industrial Development Zone (IDZ)" has the meaning assigned thereto in section 21A of the Customs and Excise Act;
 
"Industrial Development Zone (IDZ) operator" has the meaning assigned thereto in terms of section 21A of the Customs and

Excise Act.
 
"input tax" in relation to a vendor, means-
 
a)   tax charged under section 7 and payable in terms of that section by-
 
i)    a supplier on the supply of goods or services made by that supplier to the vendor; or
 
ii)   the vendor on the importation of goods by him; or iii)  the vendor under the provisions of section 7(3);
b)   an amount equal to the tax fraction (being the tax fraction applicable at the time the supply is deemed to have taken place) of the lesser of any consideration in money given by the vendor for or the open market value of the supply (not being a taxable supply) to him by way of a sale on or after the commencement date by a resident of the Republic (other than a person or diplomatic or consular mission of a foreign country established in the Republic that was granted relief, by way of a refund of tax as contemplated in section 68) of any second-
hand goods situated in the Republic: Provided that where such second-hand goods consist of-
 
i)    fixed property in respect of the acquisition of which transfer duty is, in terms of the Transfer Duty Act, payable or would have been payable had an exemption from transfer duty (whether in terms of the Transfer Duty Act or any other Act of Parliament) not been applicable; or
 
ii)   a share in a share block company in respect of the original issue or registration of transfer of which stamp duty is, in terms of the Stamp Duties Act, payable or would have been payable had an exemption from stamp duty (whether in terms of the Stamp Duties Act or any other Act of Parliament) not been applicable,
 
such amount shall not exceed the amount of transfer duty or

 
 
 
 

                        

18                         19


 

 

stamp duty, as the case may be, which is or would have been payable in respect of such acquisition, original issue or registration of transfer, as the case may be; and
 
c)    an amount equal to the tax fraction of the consideration in money deemed by section 10(16) to be for the supply (not being a taxable supply) by a debtor to the vendor of goods repossessed under an instalment credit agreement: Provided that the tax fraction applicable under this paragraph shall be the

iv)


 
aa) the purchaser does not become the owner of those goods merely by virtue of the delivery to or the use, possession or enjoyment by him thereof; or
 
bb) the seller is entitled to the return of those goods if the purchaser fails to comply with any term of that agreement; or

tax fraction applicable at the time of supply of the goods to the debtor under such agreement as contemplated in section 9(3)(c),
 
where the goods or services concerned are acquired by the vendor wholly for the purpose of consumption, use or supply in the course of making taxable supplies or, where the goods or services are acquired by the vendor partly for such purpose, to the extent (as determined in accordance with the provisions of section 17) that
the goods or services concerned are acquired by the vendor for such purpose;
 
"instalment credit agreement" means any agreement entered into on or after the commencement date whereby any goods consisting of corporeal movable goods or of any machinery or plant, whether movable or immovable-
 
a)   are supplied under a sale under which-
 
i)    the goods are sold by the seller to the purchaser against payment by the purchaser to the seller of a stated or determinable sum of money at a stated or determinable future date or in whole or in part in instalments over a period in the future; and
 
ii)   Such sum of money includes finance charges, including any amount determined with reference to time value of money, stipulated in the lease; and
 
iii)  the aggregate of the amounts payable by the purchaser to the seller under such agreement exceeds the cash value of the supply; and

b)   are supplied under a lease under which-
 
i)    the rent consists of a stated or determinable sum of money payable at a stated or determinable future date or periodically in whole or in part in instalments over a period in the future; and
 
ii)   such sum of money includes finance charges stipulated in the lease; and
 
iii)  the aggregate of the amounts payable under such lease by the lessee to the lessor for the period of such lease (disregarding the right of any party thereto to terminate the lease before the end of such period) and any residual value of the leased goods on termination of the lease, as stipulated in the lease, exceeds the cash value of the supply; and
 
iv)  the lessee is entitled to the possession, use or enjoyment of those goods for a period of at least 12 months; and
 
(v)  (aa) the lessee accepts the full risk of destruction or loss of, or other disadvantage to, those goods and assumes all obligations of whatever nature arising in connection with the insurance, maintenance and repair of those goods while the agreement remains in force; or
 
(bb) (A) the lessor accepts full risk of destruction or loss of, or other disadvantage to those goods and assumes all obligations of whatever nature arising in connection with the insurance of those goods; and

 
 
 
 

                        

20                         21


 

 

(B) the lessee accepts the full risk of maintenance and repair of those goods and reimburses the lessor for the insurance of those goods, while the agreement remains in force.
 
"insurance" means insurance or guarantee against loss, damage, injury or risk of any kind whatever, whether pursuant to any contract or law, and includes reinsurance; and "contract of insurance" includes a policy of insurance, an insurance cover, and a renewal of a contract of insurance: Provided that nothing in this definition shall apply to any insurance specified in section 2;
 
"invoice" means a document notifying an obligation to make payment;
 
"licensed customs and excise storage warehouse" means a warehouse licensed by the Commissioner at any place appointed for that purpose under the provisions of the Customs and Excise Act, which has been approved by the Commissioner for the storage of goods as he may approve in respect of that warehouse;
 
"local authority" [deleted by the Amendment of Taxation Laws Act
No. 9 of 2006]
 
"Minister" means the Minister of Finance;
 
"money" means-
 
a)   coins (other than coins made wholly or mainly from a precious metal other than silver) which the South African Reserve Bank has issued in the Republic in accordance with the provisions of section 14 of the South African Reserve Bank Act, 1989 (Act No. 90 of 1989), or which remain in circulation as contemplated in the proviso to subsection (1) of that section, and any paper currency which under the said Act is a legal tender;
 
b)
 
i)    any coin (other than a coin made wholly or mainly from a precious metal) or paper currency of any country other than the Republic which is used or circulated or is intended for use or circulation as currency;

ii)   any bill of exchange, promissory note, bank draft, postal order or money order,
 
except when disposed of or imported as a collector's piece, investment article or item of numismatic interest;
 
"month" means any of the twelve portions into which any calendar year is divided;
 
"motor car" includes a motor car, station wagon, minibus, double cab light delivery vehicle and any other motor vehicle of a kind normally used on public roads, which has three or more wheels
and is constructed or converted wholly or mainly for the carriage of passengers, but does not include-
 
a)   vehicles capable of accommodating only one person or suitable for carrying more than 16 persons, or
 
b)   vehicles of an unladen mass of 3 500 kilograms or more; or c)   caravans and ambulances;
d)   vehicles constructed for a special purpose other than the carriage of persons and having no accommodation for carrying persons other than such as is incidental to that purpose;
 
e)   game viewing vehicles (other than sedans, station wagons, minibuses or double cab light delivery vehicles) constructed or permanently converted for the carriage of seven or more passengers for game viewing in national parks, game reserves, sanctuaries or safari areas and used exclusively for that purpose, other than use which is merely incidental and subordinate to that use; or
 
f)    vehicles, constructed as or permanently converted into hearses for the transport of deceased persons and used exclusively for that purpose;
 
"municipality" means a municipality as defined in section 1 of the
Income Tax Act;

 
 
 
 

                        

22                         23


 

 

"municipal rate" means a rate levied by a municipality in terms of section 2 of the Local Government: Municipal Property Rates Act,
2004 (Act No. 6 of 2004), on 'rateable property' of an 'owner' as defined in section 1 of that Act respectively: Provided that a municipal rate does not include-
 
a)   a single charge levied by that municipality for rates and other supplies of goods or services such as-
 
i)    electricity, gas, water; or
ii)   drainage, removal or disposal of sewage or garbage; or iii)  goods or services that are incidental to, or necessary for
the supply of those goods or services, to that owner; or
 
b)   a rate levied in respect of supplies of goods or services contemplated in paragraph (a);
 
"open market value" in relation to the supply of goods or services, means the open market value thereof determined in accordance with the provisions of section 3;
 
"output tax" in relation to any vendor, means the tax charged
under section 7(1)(a) in respect of the supply of goods and services by that vendor;
 
"person" includes any public authority, any municipality, any company, any body of persons (corporate or unincorporate), the estate of any deceased or insolvent person, any trust fund and any foreign donor funded project;
 
"precious metals" means gold, silver, platinum, iridium and any other metals of the platinum group, and any other metal which the State President has by proclamation in the Gazette declared to be a precious metal for the purpose of this Act;
 
"prescribed rate" in relation to any interest payable in terms of this Act means a rate equal to the rate fixed from time to time by the Minister by notice in the Gazette in terms of section 80(1)(b) of the Public Finance Management Act, 1999 (Act No. 1 of 1999):

Provided that where the Minister fixes a new rate in terms of that Act, that new rate applies for purposes of this Act from the first day of the second month following the date on which that new rate came into operation;
 
"prescribed tax rate" [Definition of "prescribed tax rate" deleted by s.21(c) of Act No. 136 of 1991.]
 
"public authority" means-
 
i)    any department or division of the public service as listed in
Schedules 1, 2 or 3 of the Public Service Act, 1994 (Act No.
103 of 1994); or
 
ii)   any public entity listed in Part A or C of Schedule 3 to the
Public Finance Management Act, 1999 (Act No. 1 of 1999); or
 
iii)  any other public entity designated by the Minister for the purposes of this Act to be a public authority;
 
"recipient" in relation to any supply of goods or services, means the person to whom the supply is made;
 
"registration number" deleted by the Taxation Laws Amendment
Act, 2004 (16 of 2004).
 
"rental agreement" means-
 
a)   any agreement entered into before, on or after the commencement date for the letting of goods, other than a
lease referred to in paragraph (b) of the definition of "instalment credit agreement" in this section or a financial lease as defined in the Sales Tax Act, 1978 (Act No. 103 of 1978), prior to its repeal; and
 
b)   any rental agreement, as defined in the said Act where such agreement is in force on or after the commencement date;
 
"Republic" in the geographical sense, means the territory of the Republic of South Africa and includes the territorial waters, the contiguous zone and the continental shelf referred to respectively

 
 
 
 

                        

24                         25


 

 

in sections 4, 5 and 8 of the Maritime Zones Act, 1994 (Act No. I5 of 1994);
 
"resident of the Republic" means a resident as defined in section
1 of the Income Tax Act: Provided that any other person or any other company shall be deemed to be a resident of the Republic to the extent that such person or company carries on in the Republic any enterprise or other activity and has a fixed or permanent place in the Republic relating to such enterprise or other activity;
 
"returnable container" means any container belonging to a class of containers in relation to which, at the time of delivery of the contents thereof, ownership of that container is not transferred to the recipient of the contents and a specifically identified amount is usually charged as a deposit by the supplier of the contents upon the express undertaking of the supplier that upon the return of that container such deposit will be refunded or allowed as a credit to such recipient or any other person returning such container;
 
"sale" means an agreement of purchase and sale and includes any transaction or act whereby or in consequence of which ownership of goods passes or is to pass from one person to another;
 
"second-hand goods" means-
 
a)   goods which were previously owned and used; or
 
b)   in respect of the transfer of a unit in the circumstances referred to in Item 8 of Schedule 1 to the Share Blocks Control Act, such unit,
 
but does not include- i)          animals;
ii)   gold coins contemplated in section 11(1)(k);
 
iii)  any prospecting right, mining right, exploration right, production right, mining permit, retention permit or reconnaissance permit as defined in section 1 of the Mineral and Petroleum Resources Development Act, 2002

(Act No. 28 of 2002), or any reconnaissance permission contemplated in section 14 of that Act granted or renewed in terms of that Act or received upon conversion pursuant to Schedule II, except when that prospecting right, mining right, exploration right, production right or interest in that right is transferred, ceded, let, sublet, alienated, varied or
otherwise disposed of as contemplated in section 11 of the
Mineral and Petroleum Resources Development Act, 2002;
 
iv)  any fixed property acquired in terms of the Provision of
Land and Assistance Act, 1993 (Act No. 126 of 1993); and
 
v)   any fixed property acquired in terms of section 42E of the
Restitution of Land Rights Act, 1994 (Act No. 22 of 1994);
 
"service enterprise" has the meaning assigned thereto in terms of section 21A of the Customs and Excise Act;
 
"services" means anything done or to be done, including the granting, assignment, cession or surrender of any right or the making available of any facility or advantage, but excluding a supply of goods , money or any stamp, form or card contemplated in paragraph (c) of the definition of "goods";
 
"share block company" means a share block company as defined in section 1 of the Share Blocks Control Act;
 
"Share Blocks Control Act" means the Share Blocks Control Act,
1980 (Act No. 59 of 1980);
 
"South African Revenue Service" means the South African Revenue Service established by section 2 of the South African Revenue Service Act, 1997;
 
"specified country" [Definition of "specified country" deleted by s.9(1)(m) of Act No. 20 of 1994.]
 
"Stamp Duties Act" means the Stamp Duties Act, 1968 (Act No.
77 of 1968);
 
"supplier" in relation to any supply of goods or services, means

 
 
 
 

                        

26                         27


 

 

the person supplying the goods or services;
 
"supply" includes performance in terms of a sale, rental agreement, instalment credit agreement and all other forms of supply, whether voluntary, compulsory or by operation of law, irrespective of where the supply is effected, and any derivative of "supply" shall be construed accordingly;
 
"tax" means the tax chargeable in terms of this Act;
 
"taxable supply" means any supply of goods or services which is chargeable with tax under the provisions of section 7(1)(a), including tax chargeable at the rate of zero per cent under section
11;
 
"tax fraction" means the fraction calculated in accordance with the formula: r/(100+r)
 
in which formula "r" is the rate of tax applicable under section 7(1);
 
"tax invoice" means a document provided as required by section
20;
 
"tax period" in relation to a vendor, means a tax period determined under section 27;
 
"this Act" includes the regulations;
 
"Transfer Duty Act" means the Transfer Duty Act, 1949 (Act No.
40 of 1949);
 
"transfer payment" [deleted by the Revenue Laws Amendment
Act, 2003];
 
"transitional metropolitan council" means a transitional metropolitan council as defined in section 1 of the Local Government Transition Act, 1993 (Act No. 209 of 1993);
 
"trust fund" means any fund consisting of cash or other assets the administration and control of which is entrusted to any person acting in a fiduciary capacity by any person, whether under a deed of trust or by agreement, or by a deceased person under a will

made by that person;
 
"unconditional gift" *[deleted by Revenue Laws Amendment Act, No. 32 of 2004];
 
"VAT registration number" in relation to any vendor, means the number allocated to that vendor by the Commissioner for the purposes of this Act;'
 
"vendor" means any person who is or is required to be registered under this Act: Provided that where the Commissioner has under section 23 or 50A determined the date from which a person is a vendor that person shall be deemed to be a vendor from that date;
 
"welfare organization" means any public benefit organisation contemplated in paragraph (a) of the definition of 'public benefit organisation' in section 30(1) of the Income Tax Act, that has been approved by the Commissioner in terms of section 30(3) of that Act, if it carries on or intends to carry on any welfare activity determined by the Minister for purposes of this Act, relating to those activities that fall under the headings -
 
a)   welfare and humanitarian;
 
b)   health care;
 
c)   land and housing;
 
d)   education and development; or
 
e)   conservation, environment and animal welfare.

 
 
 
 

                        

28                         29


 

 
2. Financial services
 
1)   For the purposes of this Act, the following activities shall be deemed to be financial services :
 
a)   The exchange of currency (whether effected by the exchange of bank notes or coin, by crediting or debiting accounts, or otherwise);
 
b)   the issue, payment, collection or transfer of ownership of a cheque or letter of credit;
 
c)   the issue, allotment, drawing, acceptance, endorsement or transfer of ownership of a debt security;
 
d)   the issue, allotment or transfer of ownership of an equity security or a participatory security;
 
e)   Deleted by Act 37 of 1996
 
f)    the provision by any person of credit under an agreement by which money or money's worth is provided by that person to another person who agrees to pay in the future a sum or sums exceeding in the aggregate the amount of such money or money's worth;
 
g)   Deleted by Act 37 of 1996 h)   Deleted by Act 37 of 1996
i)    the provision, or transfer of ownership, of a long-term insurance policy or the provision of reinsurance in respect of any such policy: Provided that such an activity shall not be deemed to be a financial service to the extent that it includes the management of a superannuation scheme;
 
j)    the provision, or transfer of ownership, of an interest in a superannuation scheme;
 
k)   the buying or selling of any derivative or the granting of an option: Provided that where a supply of the underlying

 
 
 
 

                        

30                         31


 

 

goods or services takes place, that supply shall be deemed to be a separate supply of goods or services at the open market value thereof: Provided further that the open market value of those goods or services shall not be deemed to be consideration for a financial service as contemplated in this paragraph;
 
l)    deleted by the Taxation Laws Amendment Act, 2004 (16 of
2004);
 
Provided that the activities contemplated in paragraphs(a), (b), (c), (d) and (f) shall not be deemed to be financial services to the extent that the consideration payable in respect thereof is any fee, commission, merchant's discount or similar charge, excluding any discounting cost.
 
2)   For the purposes of subsection (1)-
 
i)    "cheque" means a bill drawn on a bank payable on demand, a postal order, a money order, a traveller's cheque, or any order or authorisation (whether in writing, by electronic means, or otherwise) to a financial institution to credit or debit any account;
 
ii)   "currency" means any banknote or other currency of any country, other than when used as a collector's piece, investment article, item of numismatic interest, or otherwise than as a medium of exchange;
 
iii)  "debt security" means-
 
an interest in or right to be paid money;or an obligation or liability to pay money that is, or is to be, owing by any person, but does not include a cheque;
 
iii   A) ''derivative'' means a derivative as defined for purposes of Statement AC 133 of generally accepted accounting practice;
 
iv)  "equity security" means any interest in or right to a share

in the capital of a juristic person or the interest in a close corporation of a member thereof;
 
v)   "long-term insurance policy" means any policy of insurance issued in the ordinary course of carrying on long- term insurance business as defined in section 1(1) of the Long-term Insurance Act, 1998 (Act No. 52 of 1998);
 
vA) "merchant's discount" means a charge made to merchants for accepting a credit or debit card as payment for the supply of goods or services, or a similar charge made by a buying organisation;
 
vi)  "participatory security" means a participatory interest as defined in section 1 of the Collective Investment Schemes Control Act, 2002 (Act No. 45 of 2002), but does not include an equity security, a debt security, money or a cheque
 
vii) "superannuation scheme" means a scheme whereby provision is made for the payment or granting of benefits by a benefit fund, pension fund, provident fund or retirement annuity fund as defined in section 1 of the Income Tax Act.
 
3)   Notwithstanding subsection (2), the terms "debt security", "equity security" and "participatory security" do not include any of the following:
 
a)   A long-term insurance policy or any other policy of insurance;
 
b)   any ownership or interest in land, other than an interest as mortgagee;
 
c)   a share in the share capital of a share block company;
 
d)   any interest of a member of a close corporation which confers on the member a time-sharing interest as defined
in section 1 of the Property Time-sharing Control Act, 1983

 
 
 
 

                        

32                         33


 

 

(Act No. 75 of 1983), on the terms and conditions contained in the association agreement of such close corporation;
 
e)   an interest in a superannuation scheme.
 
4)   Notwithstanding anything in this section, the term "financial services " does not include-
 
a)   the cession, assignment, transfer or other supply of any right to receive payment in relation to any taxable supply where, as a result of any such cession, assignment, transfer, or supply, output tax in relation to that taxable supply would not be or become attributable to any tax period for the purposes of section 16(3); or
 
b)   [deleted by the Revenue Laws Amendment Act No. 60 of
2008]
 
c)   the transfer of any interest in or right to be paid money that is, or is to be, owing by a share block company under its loan obligation, as defined in section 1 of the Share Blocks Control Act, to any person who is or will be a shareholder
of such share block company.

3. Determination of "open market value"
 
1)   For the purposes of this section-
 
a)   "similar supply", in relation to a supply of goods or
services, means any other supply of goods or services that, in respect of the characteristics, quality, quantity, functional components, materials and reputation of the first
mentioned goods or services, is the same as, or closely or substantially resembles, that supply of goods or services;
 
b)   the open market value of a supply shall include any tax charged under section 7(1)(a) on that supply.
 
2)   For the purposes of this Act, the open market value of any supply of goods or services at any date shall be the consideration in money which the supply of those goods or services would generally fetch if supplied in similar circumstances at that date in the Republic, being a supply freely offered and made between persons who are not connected persons.
 
3)   Where the open market value of any supply of goods or services cannot be determined under subsection (2), the open market value shall be the consideration in money which a similar supply would generally fetch if supplied in similar circumstances at that date in the Republic, being a supply freely offered and made between persons who are not connected persons.
 
4)   Where the open market value of any supply of goods or services cannot be determined in terms of subsection (2) or (3), the open market value shall be determined in accordance with
a method approved by the Commissioner which provides a sufficiently objective approximation of the consideration in money which could be obtained for that supply of those goods or services.
 
5)   For the purposes of this Act the open market value of any

 
 
 
 

                        

34                         35


 

 

consideration, not being consideration in money, for a supply of goods or services shall be ascertained in the same manner, with ;my necessary modifications, as the open market value of any supply of goods or services is ascertained under the provisions of this section.

I. Administration
 
4.   Act to be administered by Commissioner
 
1)   The Commissioner shall be responsible for carrying out the provisions of this Act.
 
5.   Exercise of powers and performance of duties
 
1)   The powers conferred and the duties imposed upon the Commissioner by or in terms of the provisions of this Act or any amendment thereof may be exercised or performed by the Commissioner personally, or by any officer engaged in carrying out the said provisions under the control, direction or supervision of the Commissioner.
 
2)   Any decision made and any notice or communication issued or signed by any such officer may be withdrawn or amended by the Commissioner or by the officer concerned, and shall for the purposes of the said provisions, until it has been so withdrawn, be deemed to have been made, issued or signed by the Commissioner.
 
6.   Secrecy
 
1)   The Chief Executive Officer or a person employed in carrying out the provisions of this Act shall not-
 
a)   disclose to any person or his representative any matter in respect of any other person that may in the case of the Chief Executive Officer, in the performance of his duties as Chief Executive Officer, or in any other case, in the exercise of his powers or the performance of his duties under the said provisions, come to his knowledge; or
 
b)   permit any person to have access to any records in the possession or custody of the Commissioner,
 
except in the case of the Chief Executive Officer, in the

 
 
 
 

                        

36                         37


 

 

performance of his duties as Chief Executive Officer, or in any other case, in the exercise of his powers or the performance of his duties in terms of this Act or by order of a competent court: Provided that-
 
i)    the Auditor-General in the performance of his duties in terms of section 3 of the Auditor-General Act, 1995 (Act
12 of 1995), shall have access to all records and documents in the possession or custody of the Commissioner for the purposes of this Act; and
 
ii)   the Commissioner shall disclose to the Director- General of the National Treasury information in respect of-
 
aa) any person which is an institution contemplated in section 3(1) of the Public Finance Management Act,
1999 (Act No. 1 of 1999), or an entity contemplated in section 3 of the Local Government: Municipal Finance Management Act, 2003 (Act No. 56 of
2003), to the extent necessary for performing the functions and exercising the powers of the National Treasury in terms of those Acts; or
 
bb) any other class of persons, to the extent necessary for the purposes of tax policy design or revenue estimation.
 
2)   The provisions of subsection (1) shall not be construed as preventing the Commissioner from-
 
a)   using any information obtained by him in the exercise of his powers or the performance of his duties under this Act for the purposes of any other fiscal law administered by him;
 
b)   disclosing such information to the Commissioner for Customs and Excise if he is satisfied that it is required for the prevention or combating of the evasion of any tax, duty or levy imposed under any fiscal law

administered by that Commissioner;
 
c)   disclosing to the Statistician-General such information in relation to any person as may be required by the Statistician-General in connection with the collection of statistics in carrying out the provisions of the Statistics Act, 1999 (Act No. 6 of 1999), or any regulation thereunder;
 
d)   deleted by section 66 of Act 19 of 2001;
 
e)   publishing and making known the name and VAT
registration number of any vendor;
 
f)    disclosing to the Governor of the South African Reserve Bank or any other person to whom the powers, functions and duties have been delegated by the Minister in terms of Exchange Control Regulations,
1961, issued in terms of section 9 of the Currency and Exchanges Act, 1933 (Act No. 9 of 1933), such information as may be required for purposes of exercising any power or performing any function or duty in terms of those Regulations.
 
2A) The Commissioner may apply ex parte to a judge in chambers for an order allowing him or her to disclose to the National Commissioner of the South African Police Service, contemplated in section 6(1) of the South African Police Services Act, 1995 (Act No. 68 of 1995), or the National Director of Public Prosecutions, contemplated in section 5(2)(a) of the National Prosecuting Authority Act,
1998 (Act No. 32 of 1998), such information, which may reveal evidence-
 
a)   that an offence, other than an offence in terms of this Act or any other Act administered by the Commissioner or any other offence in respect of which the Commissioner is a complainant, has been or may be committed, or where such information may be relevant

 
 
 
 

                        

38                         39


 

 

to the investigation or prosecution of such an offence, and such offence is a serious offence in respect of which a court may impose a sentence of imprisonment exceeding five years; or
 
b)   of an imminent and serious public safety or environmental risk,
 
and where the public interest in the disclosure of the information outweighs any potential harm to the taxpayer concerned should such information be disclosed:
 
Provided that any information, document or thing provided by a taxpayer in any return or document, or obtained from a taxpayer in terms of section 57A, 578 or 57C which is disclosed in terms of this subsection, shall not, unless a competent court otherwise directs, be admissible in any criminal proceedings against such taxpayer, to the extent that such information, document or thing constitutes an admission by such taxpayer of the commission of an offence contemplated in paragraph (a).
 
28) For the purposes of subsection (2A), the Commissioner may delegate the powers vested in him or her by that subsection, to any other officer.
 
2C) The National Police Commissioner or the National Director of Public Prosecutions or any person acting under the direction and control of such National Police Commissioner or National Director of Public Prosecutions, shall not disclose any information supplied under subsection (2A) to any other person or permit any other person to have
access thereto, except in the exercise of his or her powers or the carrying out of his or her duties for purposes of -
 
a)   any investigation of, or prosecution for, an offence contemplated in subsection (2A); or

b)   dealing with any such public safety or environmental risk as contemplated in subsection (2A).
 
2D) The Director-General or any person acting under the direction and control of such Director-General shall not disclose any information supplied under proviso (ii) to subsection (1) to any other person or permit any other person to have access thereto, except in the performance of any function contemplated in proviso (ii) to subsection (1).
 
3)   A person may not in any manner publish or make known to any other person (not being an officer performing his or her duties under the control, direction or supervision of the Commissioner or the Commissioner for Customs and Excise or the Managing Director of the South African Post Office Limited) the contents or tenor of any instruction or communication given or made by the Commissioner or the Commissioner for Customs and Excise or the Postmaster- General or any such officer in the performance of his or her duties in terms of this Act for or concerning' the examination or investigation of the affairs of any person or class of persons or the fact that such instruction or
communication has been given or made, or any information concerning the tax matters of a person or class of persons: Provided that the provisions of this subsection shall not be construed-
 
a)   as preventing any person or a representative of such person who is or may be affected by any such examination, investigation or furnishing of information from publishing or making known information concerning that person's own tax matters; or
 
b)   subject to the provisions of subsections (1) and (4), as in any way limiting the duties or powers of the Commissioner or the Commissioner for Customs and Excise or the Managing Director of the South African

 
 
 
 

                        

40                         41


 

 

Post Office Limited or any such officer; or
 
c)   as preventing any person from publishing or making known anything which has been published or made known by that person or a representative of that person as contemplated in paragraph (a) or by the Commissioner or the Commissioner of Customs and Excise or the Managing Director of the South African Post Office Limited or any such officer in the exercise
of the officer's duties or powers.
 
3A) The provisions of this section shall not apply in respect of any information relating to any person, where that person has consented that such information may be published or made known to any other person
 
4)   Deleted by Act 34 of 1997.
 
5)   The Head: Central Statistical Services or any person acting under his direction and control shall not disclose any information supplied to that Head under subsection (2)(c) to any person or permit any person to have access thereto, except in the exercise of his powers or the performance of his duties to collect statistics or to publish statistics in any anonymous form.
 
5A) Notwithstanding anything to the contrary contained in this section, any 'biometrical information' of a vendor may not be disclosed by the Commissioner to any person except to the National Commissioner of the South African Police Service or the National Director of Public Prosecutions where such information relates to, and constitutes material information for, the proving of any offence in terms of this Act or a related common law offence.
 
6)   Any person who contravenes the provisions of subsection (1), (3), (4), (5) or (5A) shall be guilty of an offence and liable on conviction to a fine not exceeding R5 000 or to imprisonment for a period not exceeding two years or to both such fine and such imprisonment.

II. Value-Added Tax
 
7.   Imposition of value-added tax
 
1)   Subject to the exemptions, exceptions, deductions and adjustments provided for in this Act, there shall be levied and paid for the benefit of the National Revenue Fund a tax, to be known as the value-added tax-
 
a)   on the supply by any vendor of goods or services supplied by him on or after the commencement date in the course or furtherance of any enterprise carried on by him;
 
b)   on the importation of any goods into the Republic by any person on or after the commencement date; and
 
c)   on the supply of any imported services by any person on or after the commencement date,
 
calculated at the rate of 14 per cent on the value of the supply concerned or the importation, as the case may be.
 
2)   Except as otherwise provided in this Act, the tax payable in terms of paragraph (a) of subsection (1) shall be paid by the vendor referred to in that paragraph, the tax payable in terms of paragraph (b) of that subsection shall be paid by the person referred to in that paragraph and the tax
payable in terms of paragraph (c) of that subsection shall be paid by the recipient of the imported services.
 
3)
 
a)   Where any goods manufactured in the Republic, being of a class or kind subject to excise duty or environmental levy under Part 2 or 3 of Schedule No. 1 to the Customs and Excise Act, have been supplied at a price which does not include such excise duty or environmental levy and tax has become payable in respect of the supply in terms of subsection (1)(a),

 
 
 
 

                        

42                         43


 

 

value-added tax shall be levied and paid at the rate of
14 per cent for the benefit of the National Revenue
Fund on an amount equal to the amount of such excise duty or environmental levy which, subject to any rebate of such excise duty or environmental levy under the
said Act, is paid.
 
b)   The tax payable in terms of paragraph (a) shall be paid by the person liable in terms of the Customs and Excise Act for the payment of the said excise duty or environmental levy.
 
c)   (Deleted by Act 34 of 1997)
 
d)   Subject to this Act, the provisions of the Customs and Excise Act relating to the clearance of goods subject to excise duty or environmental levy and the payment of that excise duty or environmental levy shall mutatis mutandis have effect as if enacted in this Act.
 
s.   Certain supplies of goods or services deemed to be made or not made
 
1)   For the purposes of this Act, where-
 
a)   goods acquired, manufactured, assembled, constructed or produced by a person are sold, under a power exercisable by another person, in or towards satisfaction of a debt owed by the person whose
goods are sold; and
 
b)   the person whose goods are sold has not furnished, to the person exercising the power of sale, a statement in writing that the supply of those goods would not be a taxable supply if those goods were sold by the person whose goods are sold, and stating fully the reasons why that supply would not be a taxable supply,
 
those goods shall be deemed to be supplied in the course of an enterprise.

2)   For the purposes of this Act, where a person ceases to be a vendor, any goods (other than any goods in respect of
the acquisition of which by the vendor a deduction of input tax under section 16(3) was denied in terms of section 17(2) or would have been denied if those sections had been applicable prior to the commencement date) or right capable of assignment, cession or surrender which in either case then forms part of the assets of his enterprise, shall
be deemed to be supplied by him in the course of his enterprise immediately before he ceased to be a vendor, unless the enterprise is carried on by another person who in terms of section 53 is deemed to be a vendor: Provided that-
 
i)    where such right is so deemed to be supplied that supply shall be deemed to be a supply of a service;
 
ii)   this subsection shall not apply to any such goods or right to the extent that a deduction in terms of section
16(3) has not been allowed or will not be allowed, in respect of the acquisition or use by such vendor, where such vendor on or before 30 June 2000-
 
aa) ceases to be a vendor for the sole reason that the total value of taxable supplies made by that vendor in the preceding period of 12 months has not exceeded R20 000; or
 
bb) ceases to be a vendor in respect of a commercial rental establishment or a residential rental establishment for the sole reason that the total receipts and accruals derived from that commercial rental establishment or residential rental establishment in the preceding period of 12 months have not exceeded R48 000;
 
iii)  this subsection shall not apply to fixed property to the extent that a deduction in terms of section 16(3) has not been allowed or will not be allowed in respect of

 
 
 
 

                        

44                         45


 

 

that fixed property or any improvements thereto, where such vendor, on or before 30 June 2000, requests the Commissioner in writing, in the circumstances contemplated in section 24(2), to cancel his
registration.
 
iv)  this subsection shall not apply to a vendor that is a constitutional institution listed in Schedule 1 to the Public Finance Management Act, 1999 (Act No. 1 of
1999) or a public authority, respectively, where that vendor (other than a vendor who applied and was registered as a vendor during the period 22 December
2003 to 31 March 2005) ceases to be a vendor as a result of-
 
aa) the substitution of the definition of 'public authority' in the Revenue Laws Amendment Act, 2004 or the insertion of paragraph (viii) to the proviso to the definition of 'enterprise' in the Revenue Laws Amendment Act, (Act No. 45 of 2003); or
 
bb) the re-classification of that vendor or part of that vendor's activities within the Schedules to the Public Finance Management Act, 1999 (Act No. 1 of 1999) subsequent to the introduction of the Revenue Laws Amendment Act, 2004.
 
2A) Where a supply is deemed to have been made by a vendor in terms of subsection (2) and that vendor ceases to be a vendor solely as a consequence of the circumstances contemplated in paragraph (ii) of the proviso to subsection (2), the tax payable to the Commissioner in respect of that deemed supply shall, if the amount thereof is in excess of R3 000, be paid to the Commissioner in so many equal monthly instalments as the Commissioner may allow, the last of which shall not be paid later than 28 February 2001.
 
2B) Where a supply is deemed to have been made by a vendor in terms of subsection (2) and that vendor ceases on or

before 30 June 2005 to be a vendor solely as a consequence of the introduction of proviso (ix) to the definition of 'enterprise' in section 1, the tax payable to the Commissioner in respect of that deemed supply shall, if the amount thereof is in excess of R3 000, be paid to the Commissioner in so many equal monthly instalments as the Commissioner may allow.
 
2C) Where a supply is deemed to have been made by a vendor in terms of subsection (2) and that vendor ceases to be a vendor for the sole reason that the vendor has registered
as a 'micro business' as defined in the Sixth Schedule of the Income Tax Act, the tax payable in respect of that deemed supply shall be paid in six equal monthly instalments or in so many monthly instalments as the Commissioner may allow.
 
2D) Where a supply is deemed to have been made by a vendor in terms of subsection (2) and that vendor ceases to be a vendor on or before 30 June 2009 for the sole reason that the total value of taxable supplies made by that vendor in the preceding period of 12 months has not exceeded R1 million, the tax payable in respect of that deemed supply shall be paid in six equal monthly instalments or in so many monthly instalments as the Commissioner may allow.
 
2E) Where a supply is deemed to have been made by a vendor in terms of subsection (2) and that vendor ceases to be a vendor for the solereason that the total value of taxable supplies made by that vendor in the preceding period of 12 months has not exceeded the amount contemplated in section 23(1) or 23(3), the Minister may by regulation prescribe the period in which the tax payable in respect of that deemed supply shall be paid.
 
2F) Where a supply is deemed to have been made by a vendor in terms of subsection (2) and the vendor ceases on or after
1 January 2013 to be a vendor solely by reason of the supply of goods or services being exempt under section 12

 
 
 
 

                        

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(l) or (m), the value of that deemed supply shall be deemed to be nil.
 
3)   For the purposes of this Act, a credit agreement to which section 121 of the National Credit Act, 2005 (Act No. 34 of
2005), applies shall be deemed not to be a supply of goods or services if the consumer has exercised the right to rescind that agreement in the manner and within the time permitted by that section.
 
4)
 
a)   For the purposes of this Act, any lay-by agreement (as defined in Government Notice No. R 1234 of 13 June
1980, as amended by Government Notice No. R 1814 of 29 August 1980, issued in terms of section 9 of the Sale and Service Matters Act, 1964 (Act No. 25 of
1964)), whereby goods are sold for a consideration not exceeding R10 000 and are reserved by deposit for delivery when the purchase price or a determined portion thereof is paid shall not be deemed to be a supply of goods or services unless and until the goods are delivered to the purchaser.
 
b)   Where such agreement is cancelled or terminates for any other reason and the seller retains any amount paid by the purchaser or recovers any amount owing by the purchaser under such agreement, the seller shall for
the purposes of this Act be deemed to have supplied a service in respect of such agreement.
 
5)   For the purposes of this Act a designated entity shall be deemed to supply services to any public authority or municipality to the extent of any payment made by the public authority or municipality concerned to or on behalf of that designated entity in the course or furtherance of an entrprise carried on by that designated entity.
 
5A) For the purposes of section 11(2)(t), a vendor (excluding a designated entity) shall be deemed to supply services to

any public authority, municipality or constitutional institution listed in Schedule 1 to the Public Finance Management Act, 1999 (Act No. 1 of 1999) to the extent of any grant paid to or on behalf of that vendor in the course or furtherance of an enterprise carried on by that vendor.
 
58) For the purposes of this Act, a vendor, being a foreign donor funded project, shall be deemed to supply services to the international donor to the extent of the international donor funding received from an international donor.
 
6)   For the purposes of this Act, the transfer of all its assets
and liabilities by an administrative unit of a municipality that is separately registered under subsection (2) of section 50, to the vendor intended in subsection (1) of that section,
shall be deemed not to be a supply.
 
7)   The disposal of an enterprise as a going concern, or a part thereof which is capable of separate operation, shall for the purposes of this Act be deemed to be a supply of goods made in the course or furtherance of such enterprise.
 
8)   For the purposes of this Act, except section 16(3), where a vendor receives any indemnity payment under a contract of insurance or is indemnified under a contract of insurance
by the payment of an amount of money to another person, that payment or indemnification, as the case may be, shall, to the extent that it relates to a loss incurred in the course of carrying on an enterprise, be deemed to be consideration received for a supply of services performed on the day of receipt of that payment or on the date of
payment to such other person, as the case may be, by that vendor in the course or furtherance of his enterprise: Provided that this subsection shall not apply in respect of any indemnity payment received or indemnification under a contract of insurance where the supply of services contemplated by that contract is not a supply subject to
tax under section 7(1)(a): Provided further that this subsection shall not apply in respect of any indemnity

 
 
 
 

                        

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payment received by a vendor under a contract of insurance to the extent that such payment relates to the total reinstatement of goods, stolen or damaged beyond economic repair, in respect of the acquisition of which by the vendor a deduction of input tax under section 16(3) was denied in terms of section 17(2) or would have been denied if these sections had been applicable prior to the commencement date.
 
9)   For the purposes of this Act, where any vendor in carrying on an enterprise in the Republic consigns or delivers goods to an address outside the Republic or provides any service to or for the purposes of his branch or main business outside the Republic in respect of which the provisions of paragraph (ii) of the proviso to the definition of "enterprise" in section 1 are applicable, the vendor shall be deemed to supply such goods or service in the course or furtherance
of his enterprise.
 
10) For the purposes of this Act, where any goods are repossessed under an instalment credit agreement, a supply of such goods shall be deemed to be made by the debtor under such instalment credit agreement to the person exercising his right of possession, and where such debtor is a vendor the supply shall be deemed to be made in the course or furtherance of his enterprise unless such goods did not form part of the assets held or used by him for the purposes of his enterprise.
 
11) For the purposes of this Act a supply of the use or right to use or the grant of permission to use any goods (whether with or without a driver, pilot, crew or operator) under any rental agreement, instalment credit agreement, charter party, agreement for charter or any other agreement under which such use or permission to use is granted, shall be deemed to be a supply of goods.
 
12) Deleted by Act 136 of 1992

13) For the purposes of this Act, where any person bets an amount on the outcome of a race or on any other event or occurrence, the person with whom the bet is placed shall be deemed to supply a service to such first-mentioned person.
 
13A) For the purposes of this Act, except section 16(3), where any vendor who makes taxable supplies of services contemplated in subsection (13) of this section, receives any amount paid by any other vendor as a prize or winnings in consequence of a supply of such services made by the last-mentioned vendor to the first-mentioned vendor, the first-mentioned vendor shall be deemed to supply a service to the last-mentioned vendor.
 
14) For the purposes of this Act,-
 
a)   where any goods are supplied by a vendor to a person otherwise than in the circumstances contemplated in paragraph 2(b) of the Seventh Schedule to the lncome Tax Act, and a deduction under section 16(3) in respect of the acquisition by the vendor of those goods was denied in terms of section 17(2) or would have been denied if section 7 of this Act had been applicable prior to the commencement date, the vendor shall be deemed to have supplied the goods otherwise than in the course or furtherance of his enterprise;
 
b)   where any input tax is allowed in terms of section 18(9) in respect of a game viewing vehicle or a hearse as contemplated in paragraph (e) or (f) of the definition of
'motor car' in section 1, the subsequent supply of that game viewing vehicle or hearse shall be deemed to be supplied in the course of the vendor's enterprise.
 
14A) For the purposes of this Act, where input tax has been allowed on the conversion of a game viewing vehicle or a hearse, as contemplated in paragraph (e) or (f) of the definition of 'motor car' in section 1 and that game viewing

 
 
 
 

                        

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vehicle or hearse is subsequently applied for purposes other than those purposes as contemplated in paragraph
(e) or (f) of the definition of 'motor car' in section 1, a supply of that game viewing vehicle or hearse shall be deemed to take place.
 
15) For the purposes of this Act, where a single supply of goods or services or of goods and services would, if separate considerations had been payable, have been charged with tax in part at the rate applicable under section
11, each part of the supply concerned shall be deemed to be a separate supply: Provided that this subsection does not apply to a single charge as contemplated in paragraph (a) of the proviso to the definition of 'municipal rate' in section 1.
 
16)
 
a)   The supply by a vendor-
 
i)    of any goods (other than fixed property acquired prior to the commencement date by a vendor who is a natural person if such property was used by him mainly as his private residence and no deduction of any amount has been made by him under section 16(3) in respect of such property); or
 
ii)   of services,
 
where such goods or services were acquired or imported by him partly for the purpose of consumption, use or supply in the course of making taxable supplies (including supplies which would have been taxable supplies if section 7 of this Act had been applicable prior to the commencement date) and were held or utilized by him partly for the said purpose immediately prior to the supply by him of such goods or services, shall be deemed to be made wholly in the course or furtherance of his enterprise.


 
 
 
 
 
 
 
 
 
 
 
17)

b)   The supply by any vendor of fixed property acquired prior to the commencement date by such vendor, being a natural person, shall be deemed to be made
otherwise than in the course or furtherance of his enterprise provided-
 
i)    such property was used by him prior to such supply mainly as his private residence; and
 
ii)   no deduction of any amount has been made by him under section 16(3) in respect of such property.
 
 
a)   For the purposes of this Act, where, together with the supply of a share referred to in the definition of "fixed property" in section 1, any amount of the loan obligation, as defined in section 1 of the Share Blocks Control Act, of the share block company is allocated as contemplated in section 14 of that Act, or any amount of the loan obligation thus allocated is delegated, or
any interest in or right to be paid money that is, or is to be, owing by the share block company under its loan obligation is transferred to any person who is or will be a shareholder of such share block company, such allocation, delegation or transfer, as the case may be, shall be deemed to form part of the supply of such share.
 
b)   For the purposes of this Act, where any allocation, delegation or transfer as contemplated in paragraph (a) is made without the supply of a share referred to in the definition of "fixed property" in section 1 and otherwise than in the circumstances contemplated in that paragraph, such allocation, delegation or transfer shall be deemed to constitute the supply of a share referred to in the said definition.

 
 
 
 

                        

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18) For the purposes of the definition of "input tax" in section 1 and section 18(4) and (5), as applicable to any share block company, any taxable supply of a share referred to in subsection (17) made on or after a date fixed by the Minister by notice in the Gazette by a share block
developer where such share is a share in a share block scheme in respect of which that developer is a share block developer as contemplated in section 1 of the Share
Blocks Control Act, shall be deemed to have been made by the share block company in relation to which that
developer is a share block developer, to the extent that-
 
a)   the supply of such share to such developer was not
a taxable supply by such company to such developer;
or
 
b)   such developer was not or will not in terms of section
16(3) be entitled to make a deduction of input tax referred to in paragraph (b) of the definition of "input tax" in section 1 in respect of the supply of such share to him.
 
19) For the purposes of this Act, where any supply of -
 
(a) goods consisting of immovable property is made by a share block company -
 
(i)    in the circumstances referred to in Item 8 of
Schedule 1 to the Share Blocks Control Act; or
 
(ii)  as a result of a sale by that share block company of that immovable property, which right was conferred by reason of the ownership of a share by that person in that share block company; or
 
(b) services comprising the waiving of rights against a share block company is made to that share block company
 
(i)    in the circumstances referred to in Item 8 of
Schedule 1 to the Share Blocks Control Act; or

(ii)  by a person as part of a sale contemplated in paragraph (a)(ii), such supply shall be deemed to have been made otherwise than in the course of furtherance of an enterprise."; and
 
in the circumstances referred to in Item 8 of Schedule 1 to the Share Blocks Control Act, such supply shall be deemed to have been made otherwise than in the course or furtherance of an enterprise.
 
20) For the purposes of this Act, where an importation of goods is deemed to have been made by an agent in the circumstances contemplated in section 54(2A)(b), such agent shall be deemed to make a supply of goods to the recipient of the supply by the principal, as contemplated in subparagraph (iii) of that section.
 
21) For the purposes of this Act, compensation or any other payment, other than an amount contemplated in section
12(a), received by a vendor in consequence of the expropriation of fixed property, is deemed to be received in respect of a supply of goods made in the course or furtherance of an enterprise unless that fixed property forms no part of the assets held or used by the vendor for the purposes of an enterprise.
 
22) For the purposes of this Act, where two or more public higher education institutions or one or more subdivisions of such institutions are merged with or incorporated into a single public higher education institution in terms of a direction by the Minister of Education in terms of section
23 or 24 of the Higher Education Act, 1997 (Act No. 101 of
1997), such institutions or such subdivisions thereof prior to the merger or incorporation and the newly merged or incorporated single institutions shall be deemed to be one and the same institution.
 
23) For the purposes of this Act a vendor shall be deemed to supply services to any public authority or municipality to

 
 
 
 

                        

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the extent of any payment in terms of the Housing Subsidy
Scheme referred to in section 3(5)(a) of the Housing Act,
1997 (Act No. 107 of 1997), made to or on behalf of that vendor in respect of the taxable supply of goods and services by that vendor.
 
24) For the purposes of this Act, a vendor, being a customs controlled area enterprise or an IDZ operator, shall be deemed to supply goods in the course or furtherance of an enterprise where movable goods are temporarily removed from a place in a customs controlled area to a place
outside the customs controlled area, situated in the Republic, if those goods are not returned to the customs controlled area within 30 days of its removal, or within a period approved in writing by the Controller :
 
Provided that this subsection shall not apply where those movable goods are supplied by the customs controlled area enterprise or IDZ operator, prior to the expiry of the relevant prescribed time period.
Provided further that this subsection shall not apply to - (a) goods that are deemed to have been imported under
paragraph (i) of the proviso to section 13(1); or
 
(b) goods to which section 181(10) previously applied.
 
25) For the purposes of this Act, where any goods or services are supplied by a vendor to another vendor, those vendors must for purposes of that supply or subsequent supplies of those goods or services, be deemed to be one and the
same person provided the provisions of section 42, 44, 45 or
47 of the Income Tax Act are complied with: Provided that this subsection shall not apply to a supply contemplated in section 42 or 45 of the Income Tax Act, unless-
 
i)    that supply is of an enterprise or part of an enterprise which is capable of separate operation, where the supplier and recipient have agreed in writing that such

enterprise or part, as the case may be, is disposed of as a going concern; or
 
ii)   the enterprise or part, as the case may be, disposed of as a going concern has been carried on in, on or in relation to goods or services applied mainly for purposes of such enterprise or part, as the case may be, and partly for other purposes, such goods or services shall, where disposed of to such recipient, for the purposes of this paragraph be deemed to form part of such enterprise or part, as the case may be, notwithstanding the provisions of paragraph (v) of the proviso to the definition of 'enterprise' in section 1.
 
26) The supply of goods or services under any warranty agreement shall, for the purposes of section 11(2)(v), be deemed to be a supply of services.
 
27) For the purposes of this Act, where any amount received in respect of a taxable supply of goods or services at the rate of 14 per cent exceeds the consideration charged for that supply, and such excess amount has not been refunded within four months of receipt thereof, that excess amount shall be deemed to be consideration for a supply of services performed by the vendor in the course or furtherance of that vendor's enterprise on the last day of
the tax period during which that four month period ends.
 
9. Time of supply
 
1)   For the purposes of this Act a supply of goods or services shall, except as otherwise provided in this Act, be deemed to take place at the time an invoice is issued by the supplier or the recipient in respect of that supply or the time any payment of consideration is received by the supplier in respect of that supply, whichever time is earlier.
 
2)   A supply of goods or services shall be deemed to take place-

 
 
 
 

                        

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a)   where the supplier and the recipient are connected persons-
 
i)    in the case of a supply of goods which are to be removed, at the time of the removal; and
 
ii)   in the case of a supply of goods which are not to be removed, at the time when they are made available to the recipient; and
 
iii)  in the case of a supply of services, at the time the services are performed:
 
Provided that this paragraph shall not apply in any case where an invoice is issued in respect of that supply or any payment is made in respect of that supply on or before-
 
aa) the day on which the return is furnished for the tax period during which that supply would, but for this proviso, have been made; or
 
bb) the last day prescribed by this Act for furnishing the return for the tax period during which that supply would, but for this proviso, have been made;
 
b)   where that supply is a supply to which section 8(3) refers, on the day after the last day of the period during which the recipient may exercise the right under
section 121 of the National Credit Act, 2005 (Act No. 34 of 2005), to rescind the agreement;
 
c)   where that supply is a supply to which section 8(4) refers, at the time at which the goods are delivered to the recipient: Provided that in any case in which a supply of services is deemed to take place under section 8(4)(b), that supply of services shall be deemed to take place at the time that the agreement of sale is cancelled or terminates;

d)   where the supply is for a consideration in money received by the supplier by means of any machine, meter or other device operated by a coin or token-
 
i)    in the case of such supplier, at the time any such coin or token is taken from that machine, meter or other device by or on behalf of the supplier; and
 
ii)   in the case of the recipient of such supply at the time the coin or token is inserted into that machine, meter or other device by or on behalf of the recipient;
 
e)   where the provisions of section 8(9) are applicable in respect of the consignment or delivery of goods at an address outside the Republic or the provision of any service by a vendor to his branch or main branch at the time the goods are consigned or delivered to such branch or the service is performed, as the case may
be.
 
3)   Notwithstanding anything in subsection (1) or (2) of this section-
 
a)   where goods are supplied under any rental agreement or where services are supplied under any agreement or law which provides for periodic payments, they shall be deemed to be successively supplied for successive parts of the period of the agreement or as determined by such law, and each of the successive supplies shall be deemed to take place when a payment becomes
due or is received, whichever is the earlier;
 
b)   where and to the extent that-
 
i)    goods are supplied progressively or periodically under any agreement or law which provides for the consideration for that supply to be paid in instalments or periodically and in relation to the progressive or periodic supply of those goods; or

 
 
 
 

                        

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ii)    goods or services supplied directly in the construction, repair, improvement, erection, manufacture, assembly or alteration of goods are supplied under any agreement or law which provides for the consideration for that supply to become due and payable in instalments or periodically in relation to the progressive nature of the work,
 
those goods or services shall be deemed to be successively supplied, and each such successive supply shall be deemed to take place whenever any payment in respect of any supply becomes due, is received, or any invoice relating only to that payment is issued, whichever is the earliest;
 
c)   where goods are supplied under an instalment credit agreement, that supply shall, subject to the provisions of subsection (2)(b), be deemed to take place at the time the goods are delivered or the time any payment of consideration is received by the supplier in respect of that supply, whichever time is earlier;
 
d)   where goods consisting of fixed property or any real right therein are supplied under a sale, that supply shall be deemed to take place-
 
i)    Deleted by Act 97 of 1993
 
ii)   where registration of transfer of the goods is effected in a deeds registry, on the date of such registration; or
 
iii)  on the date on which any payment is made in respect of the consideration for such supply,
 
whichever date is earlier;
 
e)   where any supply of a service is deemed to be made as contemplated in section 8(13), the service shall be deemed to be supplied to the extent that payment of

any amount of the bet is made, and each such supply shall be deemed to take place whenever any payment in respect of such supply is received by the supplier;
 
f)    where any supply of a service is deemed to be made as contemplated in section 8(13A), the supply shall be deemed to take place whenever any amount is paid out as a prize or winnings by the supplier of the services contemplated in section 8(13).
 
4)   Subject to the provisions of subsections (2)(a) and (6), where goods are supplied under an agreement, other than an instalment credit agreement or rental agreement, and the goods or part of them are appropriated under that agreement by the recipient in circumstances where the whole of the consideration is not determined at the time they are appropriated, that supply shall be deemed to take place when and to the extent that any payment in terms of
the agreement is due or is received or an invoice relating to the supply is issued by the supplier or the recipient, whichever is the earliest.
 
5)   Where any goods or any right capable of assignment, cession or surrender is deemed to be supplied by a vendor in the course of his enterprise as contemplated in section
8(2) the time of supply shall be deemed to be the time contemplated in that section.
 
6)   Where any supply of goods or services is deemed to be made as contemplated in section 18(1) the time of supply shall be deemed to be the time that the goods or services are applied as contemplated in the said subsection.
 
7)   The supply of goods or services which is deemed to be made by any vendor as contemplated in section 18(3) shall be deemed to take place at the end of the month in respect of which the cash equivalent of the benefit or advantage concerned, as determined under the Seventh Schedule to the Income Tax Act, or a portion of such cash equivalent, is

 
 
 
 

                        

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in terms of the Fourth Schedule to that Act required to be included in the remuneration of the employee or office holder to whom the benefit or advantage is granted or, where such cash equivalent is not required to be included in the remuneration of the employee or office holder in terms of the said Fourth Schedule, on the last day of the year of assessment in terms of the said Act, as applicable to that employee or office holder, during which the benefit or advantage was granted to him.
 
8)   Where a supply of repossessed goods is deemed by section 8(10) to be made by a debtor under an instalment credit agreement, the time of that supply shall be deemed to be the day on which the goods are repossessed or, where the debtor may under any law be reinstated in his rights and obligations under such agreement, the day after the last day of any period during which the debtor may under such law be so reinstated.
 
9)   Where any supply of goods is deemed to be made as contemplated in section 8(20), that supply shall be deemed to take place at the time the tax payable on importation of the goods is paid by the agent.
 
10) Where any supply of a game viewing vehicle or a hearse is deemed to be made as contemplated in section 8(14)(b) or
8(14A) the time of supply shall be deemed to be the time that the game viewing vehicle or hearse is supplied as contemplated in those sections.
 
11) Where any supply of goods is deemed to be made as contemplated in section 8(24), that supply shall be deemed to take place on the last day of the applicable period contemplated in section 8(24).
 
1o. Value of supply of goods or services
 
1)   For the purposes of this Act the following provisions of this section shall apply for determining the value of any supply of goods or services.

2)   The value to be placed on any supply of goods or services shall, save as is otherwise provided in this section, be the amount of the consideration for such supply, as determined in accordance with the provisions of subsection (3), less so much of such amount as represents tax: Provided that-
 
i)    there shall be excluded from such consideration the value of any postage stamp as defined in section 1 of the Post Office Act, 1958 (Act No. 44 of 1958), when used in the payment of consideration for any service supplied by the postal company as defined in section 1 of the Post Office Act, 1958;
 
ii)   where the portion of the amount of the said consideration which represents tax is not accounted for separately by the vendor, the said portion shall be deemed to be an amount equal to the tax fraction of that consideration.
 
3)   For the purposes of this Act the amount of any consideration referred to in this section shall be-
 
a)   to the extent that such consideration is a consideration in money, the amount of the money; and
 
b)   to the extent that such consideration is not a consideration in money, the open market value of that consideration.
 
4)   Where-
 
a)   a supply is made by a person for no consideration or for a consideration in money which is less than the open market value of the supply; and
 
b)   the supplier and recipient are connected persons in relation to each other; and
 
c)   if a consideration for the supply equal to the open market value of the supply had been paid by the recipient, he would not have been entitled under section 16(3) to make a deduction of the full amount of tax in respect of that supply,

 
 
 
 

                        

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the consideration in money for the supply shall be deemed to be the open market value of the supply: Provided that this subsection shall not apply to the supply of a benefit or advantage of employment contemplated in section 18(3).
 
4A) For the purposes of this Act, where any share in a share block company is sup plied, the consideration in money for that supply shall include the amount of any allocation, delegation or transfer referred to in section 8(17).
 
5)   Where goods or services are deemed to be supplied by a vendor in terms of section 8(2) or (9), the supply shall be deemed to be made for a consideration in money equal to the lesser of-
 
a)   the cost to the vendor of the acquisition, manufacture, assembly, construction or production of such goods or services, including-
 
i)     any tax charged in respect of the supply to the vendor of such goods or services or of any components, materials or services utilized by him in such manufacture, assembly, construction or production;
 
ii)   where such goods or any right referred to in section
8(2), when held by the vendor, constituted trading stock as defined in section 1 of the Income Tax Act, any further costs (including tax) incurred by him in respect of such goods or right as contemplated in section 22(3)(a) of that Act;
 
iii)  any costs (including tax) incurred by the vendor in respect of the transportation or delivery of such goods or the provision of such services in respect of such goods that are consigned or delivered or the provision of such services as contemplated in section 8(9); and
 
iv)  where such goods or services were acquired under a supply in respect of which the consideration in

money was in terms of section 10(4) deemed to be the open market value of the supply or would in terms of that section have been deemed to be the open market value of the supply were it not for the fact that the recipient would have been entitled under section 16(3) to make a deduction of the full amount of tax in respect of that supply, such open market value to the extent that it exceeds the consideration in money for that supply; or
 
b)   the open market value of such supply.
 
5A) Where goods or services are deemed to be supplied by a vendor in terms of section 8(2) and where section 8(2C) is applicable, the supply shall be deemed to be made for a consideration in money equal to the consideration as determined in subsection (5) reduced by R100 000;
 
6)   For the purposes of this Act, where goods are supplied under an instalment credit agreement, the consideration in money for the supply shall be deemed to be the cash value of that supply.
 
7)   Where goods or services are deemed by section 18(1) to be supplied by a vendor, the supply shall, subject to the provisions of subsection (8), be deemed to be made for a consideration in money equal to the open market value of such supply.
 
8)   Where any repairs, maintenance or insurance in respect of a motor vehicle is deemed to be supplied by a vendor by section 18(1), such supply shall be deemed to made for a consideration in money equal to the cost (including tax) to such vendor of acquiring such repairs, maintenance or insurance: Provided that where such vendor does not maintain accurate data for the purposes of calculating such consideration in money, such supply shall be deemed to be made for a consideration in money equal to the amount determined in the manner prescribed by the Minister in the Gazette for the category of motor vehicle concerned.

 
 
 
 

                        

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9)   Where goods or services are deemed by section 18(2) to be supplied by a vendor, the supply shall be deemed to be made for a consideration in money determined in accordance with the formula
 
A x (B - C)
 
in which formula-
 
"A" represents the lesser of- i)
aa) the adjusted cost (including any tax forming part of such adjusted cost) to the vendor of the
acquisition, manufacture, assembly, construction or production of those goods or services: Provided that where the goods or services were acquired under a supply in respect of which the
consideration in money was in terms of section
10(4) deemed to be the open market value of the supply or would in terms of that section have been deemed to be the open market value of the supply were it not for the fact that the recipient would have been entitled under section 16(3) to make a deduction of the full amount of tax in respect of
that supply, the adjusted cost of those goods or services shall be deemed to include such open market value to the extent that it exceeds the consideration in money for that supply;
 
bb) where the vendor was at some time after the acquisition of such goods or services deemed by section 18(4) to have been supplied with such goods or services, the amount which was represented by "B" in the formula contemplated in section 18(4) when such goods or services were deemed to be supplied to the vendor; or
 
cc) where the vendor was at some time after the

acquisition of the goods or Services required to make an adjustment contemplated in section 18(2) or (5), the amounts then represented by "A" in the said formula or by "B" in the formula contemplated in section 18(5) respectively, in the most recent adjustment made under section 18(2) or (5) by the vendor prior to such deemed supply of goods or services; and
 
ii)   the open market value of the supply of those goods or services at the time any reduction in the extent of the consumption or use of the goods is deemed by section
18(6) to take place;
 
"B" represents the percentage that the use or application of the goods or services for the purposes of making taxable supplies was of the total use or application of such goods or services determined under section
17(1), section 18(4) or (5) or this subsection, whichever was applicable in the period immediately preceding the
12 month period contemplated in "C"; and
 
"C" represents the percentage that, during the 12 month period during which the decrease in use or application of the goods or services is deemed to take place, the use or application of the goods or services for the purposes of making taxable supplies (in respect of which, if such goods or services had been acquired at the time of such use or application, a deduction of input tax would not have been denied in terms of section 17(2)(a)), was of the total use or application of the goods: Provided that where the percentage contemplated in "B" does not exceed the said
percentage by more than 10 per cent of the total use or application, the said percentage shall be deemed to be the percentage determined in "B".
 
10) Where domestic goods and services are supplied at an all- inclusive charge in any enterprise supplying commercial

 
 
 
 

                        

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accommodation for an unbroken period exceeding 28 days the consideration in money is deemed to be 60 per cent of the all-inclusive charge.
 
11) Where a service is under section 8(4)(b) deemed to be supplied, the consideration in money for the supply shall be deemed to be an amount equal to the amount retained or recovered as contemplated in that section.
 
12) Where any supply of goods is a supply which would, but for the proviso to section 11(1), be charged with tax at the rate of zero per cent, the consideration in money for that supply shall be deemed to be an amount equal to the purchase price of those goods to the supplier: Provided that in any case where the deduction of input tax referred to in that proviso has been made by any other person (where that supplier and that other person are connected persons), the consideration in money for that supply shall be deemed to be an amount equal to the greater of the purchase price of those goods to that supplier and the purchase price of
those goods to that other person: Provided further that for the purposes of this subsection, the purchase price of any goods shall not be reduced by any amount of input tax deducted under section 16(3) by the supplier or, as the case may be, any other person where the supplier and that other person are connected persons.
 
13) Where goods or services are deemed to be supplied by a vendor under section 18(3), the consideration in money for the supply shall be deemed to be an amount equal to the cash equivalent of the benefit or advantage granted to the employee or office holder, as contemplated in section 9(7): Provided that where such benefit or advantage consists of the right to use a motor vehicle as contemplated in paragraph 2(b) of the Seventh Schedule to the Income Tax Act, the consideration in money for the supply shall be deemed to be the amount determined in the manner prescribed by the Minister in the Gazette for the category

of motor vehicle used.
 
14) Where services are or are deemed by section 8(5) to be supplied to any public authority or municipality by any vendor the consideration in money for such supply shall be deemed to be the amount of any payment made from time to time by the public authority or municipality concerned to or on behalf of the vendor as contemplated in the said section.
 
15) [deleted by the Amendment of Taxation Laws Act Act No. 9 of 2006].
 
16) Where by reason of the repossession of goods from a debtor under an instalment credit agreement a supply of such goods is deemed by section 8(10) to be made by that debtor, the consideration in money for that supply shall be deemed to be an amount equal to the balance of the cash value of the goods (being the cash value thereof applied under subsection (6) in respect of the supply of the goods to the debtor under the said agreement) which has not been recovered on the date on which the supply of the
goods by the debtor is deemed by section 9(8) to be made: Provided that the said balance shall be deemed to be the amount remaining after deducting from the cash value so much of the sum of the payments made by the debtor under the said agreement as, on the basis of an apportionment in accordance with the rights and
obligations of the parties to the said instalment credit agreement, may properly be regarded as having been made in respect of the cash value.
 
17) Where a service is deemed by section 8(13) to be supplied to any person, the consideration in money for such supply shall be deemed to be the amount that is received in respect of the bet.
 
17A) Where a service is deemed by section 8(13A) to be supplied to any vendor, the consideration in money for

 
 
 
 

                        

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such supply shall be deemed to be the amount that is received as a prize or winnings.
 
18) Where a right to receive goods or services to the extent of a monetary value stated on any token, voucher or stamp (other than a postage stamp as defined in section 1 of the Postal Services Act, 1998, and any token, voucher or stamp contemplated in subsection (19)) is granted for a consideration in money, the supply of such token, voucher or stamp is disregarded for the purposes of this Act, except to the extent (if any) that such consideration exceeds such monetary value.
 
19) Where any token, voucher or stamp (other than a postage stamp as defined in section 1 of the Postal Services Act,
1998) is issued for a consideration in money and the holder thereof is entitled on the surrender thereof to receive goods or services specified on such token, voucher or stamp or which by usage or arrangement entitles the holder to specified goods or services, without any further charge, the value of the supply of the goods or services made upon the surrender of such token, voucher or stamp is regarded as nil.
 
20) Where any token, voucher or stamp is issued by any vendor for no consideration and the holder thereof is entitled on surrender thereof to another person, being the supplier of goods or services, to a discount on the price of goods or services supplied to the holder, the consideration in money for the supply of such goods or services shall be deemed to include the monetary value stated on such token, voucher or stamp: Provided that such monetary value shall be deemed to include tax.
 
21) Where any supply of entertainment is made by a vendor and in terms of section 17 no deduction of input tax was made in terms of section 16(3) in respect of the acquisition by the vendor of goods or services for the purpose of such

entertainment, the value of such supply shall be deemed to be nil.
 
21A) A Where any supply of medical or dental services or other goods or services is made as contemplated in section
17(2)(d) by a scheme referred to in that section, the value of such supply shall be deemed to be nil.
 
22) Where a taxable supply is not the only matter to which a consideration relates, the supply shall be deemed to be for such part of the consideration as is properly attributable to it.
 
22A) Where any supply is made which comprises the management of a superannuation scheme as contemplated in section 2(1)(i), the consideration in money for such
supply shall be deemed to be the greater of the cost of making such supply or any consideration for such supply.
 
228) Where any supply of goods is deemed to be made as contemplated in section 8(20), the consideration in money for such supply shall be deemed to be the total amount of the value placed on the importation in terms of section
7(1)(b).
 
23) Save as otherwise provided in this section, where any supply is made for no consideration the value of that supply shall be deemed to be nil.
 
24) Where a game viewing vehicle or a hearse is deemed to be supplied by a vendor in terms of section 8(14)(b) or (14A) the supply shall be deemed to be made for a consideration in money equal to the open market value, of that game viewing vehicle or hearse.
 
25) Where any goods are deemed by section 8(24) to be supplied to any person, the consideration in money shall
be deemed to be the open market value of those goods on the date contemplated in section 9(11).

 
 
 
 

                        

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26) Where a service is deemed to be supplied under section
8(27), the consideration in money for the supply shall be deemed to be the excess amount contemplated in that section.
 
11. Zero rating
 
1)   Where, but for this section, a supply of goods would be charged with tax at the rate referred to in section 7(1), such supply of goods shall, subject to compliance with subsection (3) of this section, be charged with tax at the rate of zero per cent where-
 
a)   the supplier has supplied the goods (being movable goods) in terms of a sale or instalment credit agreement and the goods have been exported-
 
i)    as contemplated in the regulation referred to in the definition of 'exported' in section 1; or
 
ii)   by the recipient and the supplier has elected to supply the goods at the zero rate as contemplated in the regulation referred to in the definition of
'exported' in section 1: Provided that-
aa) where a supplier has supplied the goods to the recipient in the Republic otherwise than in terms of this subparagraph, such supply shall not be charged with tax at the rate of zero per cent; and
 
bb) where the goods have been removed from the Republic by the recipient in accordance with the provisions of the regulation referred to in the definition of 'exported' in section 1, such tax shall be refunded to the recipient in accordance with the provisions of section 44(9); or
 
b)   the goods have been supplied in the course of

repairing, renovating, modifying, or treating any goods to which subsection (2)(g)(ii) or (iv) refers and the goods supplied-
 
i.    are wrought into, affixed to, attached to or otherwise form part of those other goods; or
 
ii.   being consumable goods, become unusable or worthless as a direct result of being used in
that repair, renovation, modification or treatment process; or
 
c)   the goods (being movable goods) are supplied to a lessee or other person under a rental agreement, charter party or agreement for chartering, if the goods are used exclusively in an export country, or by a customs controlled area enterprise or an IDZ operator in a customs controlled area : Provided that this subsection shall not apply where a "motor car"as defined in section 1 is supplied to a person located in a customs controlled area;
 
d)   the goods (being movable goods) are supplied to a lessee or other person under a rental agreement, charter party or agreement for chartering, if those goods are used by that lessee or other person exclusively in any commercial, financial, industrial, mining, farming, fishing or professional concern conducted in an export country and payment of rent or other consideration under that agreement is effected from such export country; or
 
e)   the supply is to a registered vendor of an enterprise or of a part of an enterprise which is capable of separate operation, where the supplier and the recipient have agreed in writing that such
enterprise or part, as the case may be, is disposed of as a going concern: Provided that-

 
 
 
 

                        

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i)    such enterprise or part, as the case may be, shall not be disposed of as a going concern unless-
 
aa) such supplier and such recipient have, at the time of the conclusion of the agreement for the disposal of the enterprise or part, as the case may be, agreed in writing that
such enterprise or part, as the case may be, will be an income-earning activity on the date of transfer thereof; and
 
bb) the assets which are necessary for carrying on such enterprise or part, as the case may be, are disposed of by such supplier to such recipient, and
 
cc) in respect of supplies on or after 1 January
2000, such supplier and such recipient have at the time of the conclusion of the agreement for the disposal of such enterprise or part, as the case may be, agreed in writing that the consideration agreed upon for that supply is inclusive of tax at the rate of zero per cent;
 
ii)   where the enterprise or part, as the case may be, disposed of as a going concern has been carried on in, on or in relation to goods or services applied mainly for purposes of such enterprise or part, as the case may be, and partly for other purposes, such goods or services shall, where disposed of to such recipient, for the purposes of this paragraph and section 18A be deemed to form part of such enterprise or part, as the case may be, notwithstanding the provisions of paragraph (v) of the proviso to the definition of "enterprise" in

section 1; or
 
f)    the supply is to the South African Reserve Bank, the South African Mint Company (Proprietary) Limited or any bank registered under the Banks Act, 1990 (Act No. 94 of 1990), of gold in the form of bars, blank coins, ingots, buttons, wire, plate or granules or in solution, which has not undergone any manufacturing process other than the refining thereof or the manufacture or production of such bars, blank coins, ingots, buttons, wire, plate, granules or solution; or
 
g)   the supply is of such goods used or consumed for agricultural, pastoral or other farming purposes as are set forth in Part A of Schedule 2, provided such supply is made in compliance with such conditions as may be prescribed in the said Part; or
 
h)   the goods consist of fuel levy goods referred to in
Fuel Item Levy numbers 195.10.03, and 195.10.17,
195.20.01 and 195.20.03 in Part 5A of Schedule
No. 1 to the Customs and Excise Act; or
 
hA) the goods consist of petroleum oil and oils obtained from bituminous minerals, known as crude,referred to in Heading No. 27.09 in Chapter 27 of Part 1 of Schedule No. 1 to the Customs and Excise Act when supplied for the purpose of being refined for the production of fuel levy goods as defined in section 1 of the Customs and Excise Act; or
 
hB) [deleted by the Amendment of Taxation Laws
Act No. 9 of 2006];
 
i)    the goods are supplied, as contemplated in section
8(9); or
 
j)    the goods consist of such foodstuffs as are set

 
 
 
 

                        

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forth in Part B of Schedule 2, but subject to such conditions as may be prescribed in the said Part; or
 
k)   the goods are gold coins supplied as such and which the Reserve Bank has issued in the Republic in accordance with the provisions of section 14 of the South African Reserve Bank Act, 1989(Act No.
90 of 1989), or which remain in circulation as contemplated in the proviso to subsection (1) of that section; or
 
l)    the goods consist of illuminating kerosene (marked) intended for use as fuel for illuminating or heating, referred to in Fuel Item Levy number 195.10.13 in Part 5A of Schedule No. 1 to the Customs and Excise Act and are not mixed or blended with another substance; or
 
Provided that paragraphs (a), (b), (c), (d) and (i) of this subsection shall not apply in respect of any supply of goods by a vendor if in respect of such goods input tax contemplated in paragraph (b) of the definition of "input tax" in section 1 has been deducted in terms of
section 16(3) by that vendor or any other person where that vendor and that other person are connected persons.
 
m)  a vendor supplies movable goods, (excluding any
'motor car' as defined in section 1), in terms of a sale or instalment credit agreement to a customs controlled area enterprise or an IDZ operator and those goods are either-
 
i)    by the supplier; or
 
ii)   by a VAT registered cartage contractor whose main activity is that of transporting goods and who is engaged by the supplier to deliver the goods and that supplier is liable for the full cost

relating to that delivery;
 
mA) a vendor supplies fixed property situated in a customs controlled area to a customs controlled area enterprise or an IDZ operator under any agreement of sale or letting or any other agreement under which the use or permission to use such
fixed property is granted;
 
n)   the goods consist of-
 
i)    any old order right or OP26 right as defined in Schedule II of the Mineral and Petroleum Resources Development Act, 2002 (Act No. 28 of 2002), wholly or partially continuing in force or wholly or partially converted into a new right pursuant to the same Schedule; or
 
ii)   any prospecting right, mining right, exploration right, production right mining permit or retention permit as defined in section 1 of the Mineral and Petroleum Resources Development Act, 2002 (Act No. 28 of 2002), wholly or partly renewed in terms of that Act;
 
o)   [deleted by the Revenue Laws Amendment Act No.
31 of 2005];
 
p)
 
i)    the supply of an enterprise or part of an enterprise as a going concern, by a vendor to that vendor's branch or division, which branch or division is separately registered in terms of section 50(2): Provided that that enterprise or part, as the case may be, shall not be disposed of as a going concern unless-
 
aa) that enterprise or part is capable of separate operation; and

 
 
 
 

                        

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bb) will be an income-earning activity on the date of transfer thereof; and
 
cc) a tax invoice issued in accordance with section 20 in relation to that supply is inclusive of tax at the rate of zero per cent; or
 
ii)   the supply of an enterprise, branch or division, as contemplated in section 50(2), as a going concern to a separately registered enterprise of that vendor: Provided that that enterprise or part, as the case may be, shall not be disposed of as a going concern unless-
 
aa) that enterprise or part is capable of separate operation; and
 
bb) will be an income-earning activity on the date of transfer thereof; and
 
cc) a tax invoice issued in accordance with section 20 in relation to that supply is inclusive of tax at the rate of zero per cent;
 
(q) the goods-
 
i)    are supplied by a vendor to a person who is
not a resident of the Republic and not a vendor and who has contracted with that vendor to deliver goods to a recipient, who is a vendor in the Republic; and
 
ii)   form part of a supply by the person referred to in paragraph (i) to the recipient; and
 
iii)  are used by the recipient wholly for the purposes of consumption, use or supply in the course of making taxable supplies; or
 
r)   compensation is paid by a public authority in terms

of section 19 of the Animal Diseases Act, 1984 (Act No. 35 of 1984) for the supply of a 'controlled animal or thing' as defined in that Act to that public authority.
 
s)   the goods (being fixed property) are supplied to the Minister of Land Affairs who acquired those goods in terms of the Provision of Land and Assistance Act, 1993 (Act No. 126 of 1993), or section 42E of the Restitution of Land Rights Act, 1994 (Act No.
22 of 1994); or
 
t)    the goods (being fixed property) are supplied to a person to the extent that the consideration for those goods is an advance or subsidy granted in terms of the Provision of Land and Assistance Act,
1993 (Act No. 126 of 1993); or
 
u)   the supply of goods, other than the supply of
goods by an inbound duty and tax free shop, which have been imported and entered for storage in a licensed Customs and Excise storage warehouse but have not been entered for home consumption; or
 
v)   the supply of goods by an inbound duty and tax free shop.
 
2)   Where, but for this section, a supply of services would be charged with tax at the rate referred to in section 7(1), such supply of services shall, subject to compliance with subsection (3) of this section, be charged with tax at the rate of zero per cent where-
 
a)   the services (not being ancillary transport services)
comprise the transport of passengers or goods -
 
i)    from a place outside the Republic to another place outside the Republic; or

 
 
 
 

                        

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ii)   from a place in the Republic to a place in an export country ; or
 
iii)  from a place in an export country to a place in the
Republic; or
 
b)   the services comprise the transport of passengers from a place in the Republic to another place in the Republic to the extent that that transport is by aircraft and constitutes "international carriage" as defined in Article
1 of the Convention set out in the Schedule to the
Carriage by Air Act, 1946 (Act No. 17 of 1946); or
 
c)   the services (including any ancillary transport services) comprise the transport of goods from a place in the Republic to another place in the Republic to the extent that those services are supplied by the same supplier as pan of the supply of services to which paragraph (a) applies; or
 
d)   the services comprise the insuring or the arranging of the insurance or the arranging of the transport of passengers or goods to which any provision of paragraph (a), (b) or (c) applies; or
 
e)   the services comprise the transport of goods or any ancillary transport services supplied directly in connection with the exportation from or the importation into the Republic of goods or the movement of goods through the Republic from one export country to another export country, where such services are supplied directly to a person who is not a resident of
the Republic and is not a vendor, otherwise than through an agent or other person; or
 
f)    the services are supplied directly in connection with land, or any improvement thereto, situated in any export country; or
 
g)   the services are supplied directly in respect of-

i)    movable property situated in any export country at the time the services are rendered; or
 
ii)   goods temporarily admitted into the Republic from an export country which are exempt from tax on importation under Items 470 and 480 of paragraph
8 of Schedule 1; or
 
iii)  goods in respect of which the provisions of paragraph (b) or (c) of the definition of "exported" in section 1 apply; or
 
iv)  the repair, maintenance, cleaning or reconditioning of a foreign-going ship or foreign-going aircraft; or
 
h)   the services comprise-
 
i)    the handling, pilotage, salvage or towage of any foreign-going ship or foreign-going aircraft while situated in the Republic; or
 
ii)   services provided in connection with the operation or management of any foreign-going ship or foreign-going aircraft; or
 
iii)  the storage, repair, maintenance, cleaning. management or arranging the provision of a container referred to in paragraph (1)(i) of Schedule
1 or the arranging of those services,
 
where the services are supplied directly to a person who is not a resident of the Republic and is not a vendor, otherwise than through an agent or other person; or
 
i)    the services of arranging-
 
i)    the supply of goods as contemplated in paragraph
(b) or (c) of the definition of "exported"; or
 
ii)   the supply of services referred to in paragraph

 
 
 
 

                        

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(g)(iv) or (h); or
 
iii)  the transport of goods (including ancillary transport services) within the Republic,
 
for a person who is not a resident of the Republic and is not a vendor; or
 
j)    the services comprise the repair, maintenance, cleaning or reconditioning of a railway train operated by a
person who is not a resident of the Republic and is not a vendor; or
 
k)   the services are physically rendered elsewhere than in the Republic, or to a customs controlled area enterprise or an IDZ operator in a customs controlled area; or
 
l)    the services are supplied to a person who is not a resident of the Republic, not being services which are supplied directly-
 
i)    in connection with land or any improvement thereto situated inside the Republic; or
 
ii)   in connection with movable property (excluding debt securities, equity securities or participatory securities) situated inside the Republic at the time the services are rendered, except movable property which-
 
aa) is exported to the said person subsequent to the supply of such services; or
 
bb) forms part of a supply by the said person to a registered vendor and such services are supplied to the said person for purposes of such supply to the registered vendor; or
 
iii)  to the said person or any other person, other than in circimstances conemplated in subparagraph

(ii)(bb), if the said person or such other person is in the Republic at the time the services are rendered,
 
and not being services which are the acceptance by any person of an obligation to refrain from carrying on any enterprise, to the extent that the carrying on of that enterprise would have occurred within the Republic; or
 
m)  the services comprise-
 
i)    the filing, prosecution, granting, maintenance, transfer, assignment, licensing or enforcement, including the incidental supply by the supplier of such services of any other services which are necessary for the supply of such services, of intellectual property rights, including patents, designs, trade marks, copyrights, know-how, confidential information, trade secrets or similar rights; or
 
ii)   the acceptance by any person of an obligation to refrain from pursuing or exercising in whole or in part any such rights,
 
where and to the extent that those rights are for use outside the Republic; or
 
n)   the services comprise the carrying on by a welfare organisation of the activities referred to in the definition of "welfare organisation" in section 1 and to the extent that any payment in respect of those services is made in terms of section 8(5) those services shall be deemed to be supplied by that organisation to a public authority or municipality; or
 
o)   the services are supplied, as contemplated in section
8(9), by a vendor, not being services which are supplied directly-

 
 
 
 

                        

82                         83


 

 

i)    in connection with land or any improvements thereto situated inside the Republic; or
 
ii)   in connection with movable property (excluding debt securities, equity securities or participatory securities) situated inside the Republic at the time the services are rendered, except movable property which-
 
aa) is consigned or delivered to the said person at an address in an export country subsequent to the supply of such services; or
 
bb) forms part of a supply by the said person to a registered vendor and such services are supplied to the said person for purposes of such supply to the registered vendor; or
 
iii)  to the said person or any other person, other than in the circumstances contemplated in subparagraph (ii)(bb), if the said person or such other person is in the Republic at the time that the services are rendered; or
 
p)   [deleted by the Revenue Laws Amendment Act, 2003]
 
q)   the services are deemed to be supplied in terms of section 8(58); or
 
r)   the services comprise of the vocational training of employees (other than educational services contemplated in section 12(h)) for an employer who is not a resident of the Republic and who is not a vendor; or
 
s)   the services are deemed to be supplied to a public authority or municipality in terms of section 8(23); or
 
t)    the services are deemed to be supplied in terms of section 8(5A);or

u)   the services are deemed to be supplied in terms of section 8(5) by a designated entity in respect of any payment made in terms of section 10(1)(f) of the Skills Development Act, 1998 (Act No. 97 of 1998), to that designated entity; or
 
v)   the services relate to goods under warranty to the extent that the services are-
 
i)    provided in terms of that warranty;
 
ii)   supplied to the warrantor for consideration under that warranty given by the warrantor who is-
 
aa) not a resident of the Republic;
 
bb) not a vendor; and
 
cc) outside the Republic at the time the services are rendered;
 
and
 
iii)  in respect of goods that were subject to tax upon importation (in terms of section 7(1)(b) of this Act); or
 
w)  a 'municipal rate' as defined in section 1, is levied by a municipality; or
 
x)   the services are supplied by a vendor, being the owner of a horse, to the operator of a horse-racing event to the extent of any consideration paid as a result of the successful participation of that horse in that event.
 
3)   Where a rate of zero per cent has been applied by any vendor under a provision of this section, the vendor shall obtain and retain such documentary proof substantiating the vendor's entitlement to apply the said rate under those provisions as is acceptable to the Commissioner.
 
12. Exempt supplies

 
 
 
 

                        

84                         85


 

 

The supply of any of the following goods or services shall be exempt from the tax imposed under section 7(1)(a):
 
a)   The supply of any financial services , but excluding the supply of financial services which, but for this paragraph, would be charged with tax at the rate of zero per cent under section 11;
 
b)   the supply by any association not for gain of any donated goods or services or any other goods made or manufactured by such association if at least 80 per cent of the value of the materials used in making or manufacturing such other goods consists of donated goods;
 
c)   the supply of -
 
i)    a dwelling under an agreement for the letting and hiring thereof, and any 'right of occupation' as defined in section 1 of the Housing Development Schemes for Retired Persons Act, 1988 (Act No. 65 of 1988);
 
ii)   lodging or board and lodging -
 
aa) by the employer of the recipient (including an employer as defined in paragraph 1 of the Fourth Schedule to the Income Tax Act), where the recipient is entitled to occupy the accommodation as a benefit of his or her office or employment and his or her right thereto is limited to the period of his or her employment or the term of his or her office
or a period agreed upon by the supplier and the recipient;
 
bb) by the employer of the recipient, where the employer operates a hostel or boarding establishment mainly for the benefit of the employees otherwise than for the purpose of making profit; or
 
cc) [deleted by the Amendment of Taxation Laws Act

No. 9 of 2006] ;
 
d)   the supply of leasehold land by way of letting (not being a grant or sale of the lease of that land) to the extent that that land is used or is to be used for the principal purpose of accommodation in a dwelling erected or to be erected on that land;
 
e)   the supply of land (together with any improvements to such land existing on the date on which the supplier became contractually obliged to supply such land and such existing improvements to the recipient) where such land is situated outside the Republic and such supply is made by way of sale or by way of letting;
 
f)    the supply of any services to any of its members in the course of the management of-
 
i)    a body corporate as defined in section 1 of the
Sectional Titles Act, 1986 (Act No. 95 of 1986); or ii)   a share block company; or
iii)  any housing development scheme as defined in the Housing Development Schemes for Retired Persons Act, 1988 (Act No. 65 of 1988),
 
where the cost of supplying such services is met out of contributions levied by such body corporate or share block company or under such housing development scheme, as the case may be: Provided that this paragraph shall not apply or shall apply to a limited extent where such body corporate or share block company applies in writing to the Commissioner, and the Commissioner, having regard to the circumstances of the case, directs that the provisions of
this paragraph shall not apply to that body corporate or share block company or that the provisions of this paragraph shall apply only to a limited extent specified by him: Provided further that this paragraph shall not apply to the services supplied by any body corporate or share block

 
 
 
 

                        

86                         87


 

 

company which manages a property time-sharing scheme as defined in section 1 of the Property Time-sharing Control Act, 1983 (Act No. 75 of 1983);
 
g)   the supply by any person in the course of a transport business of any service comprising the transport by that person in a vehicle (other than a game viewing vehicle contemplated in paragraph (e) of the definition of 'motor car' in section 1) operated by him of fare-paying passengers and their personal effects by road or railway (excluding a funicular railway), not being a supply of any such service which, but for this paragraph, would be charged with tax at the rate of zero per cent under section
11(2)(a);
 
h)
 
i)    the supply of educational services-
 
aa) provided by the State or a school registered under the South African Schools Act, 1996 (Act No. 84 of
1996), or a public college or private college established, declared or registered as such under the Further Education and Training Colleges Act,
2006 (Act No. 16 of 2006);
 
bb) by an institution that provides higher education on a full time, part-time or distance basis and which is established or deemed to be established as a public higher education institution under the Higher Education Act, 1997 (Act No. 101 of 1997), or is declared as a public higher education institution under that Act, or is registered or conditionally registered as a private higher education institution under that Act, or
 
cc) by any public benefit organization as contemplated in paragraph (a) of the definition of "public benefit organization" contained in

section 30(1)of the Income Tax Act that has
been approved by the Commissioner in terms of section 30(3) of that Act and which has been formed for-
 
A)  adult basic education and training including literacy and numeracy education, registered under the Adult Basic Education and Training Act, 2000 (Act No. 52 of 2000), vocational training or technical education; or
 
B)  education and training of religious or social workers; or
 
C)  training or education of persons with a permanent physical or mental impairment;
 
D)  *[deleted by Revenue Laws Amentment Act No.
32 of 2004]
 
E)  provision of bridging courses to enable indigent persons to enter a higher education institution as envisaged in subparagraph (bb);
 
ii)   the supply by a school, university, technikon or college solely or mainly for the benefit of its learners or students of goods or services (including domestic
goods and services) necessary for and subordinate and incidental to the supply of services referred to in subparagraph (i) of this paragraph, if such goods or services are supplied for a consideration in the form of school fees, tuition fees or payment for board and lodging; or
 
iii)  the supply of services to learners or students or intended learners or students by the Joint Matriculation Board referred to in section 15 of the Universities Act,
1955 (Act No. 61 of 1955);

 
 
 
 

                        

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Provided that vocational or technical training provided by an employer to his employees and employees of an employer who is a connected person in relation to that employer does not constitute the supply of an educational service for the purposes of this paragraph;
 
i)    the supply of any goods or services by an employee organization to any of its members to the extent that the consideration for such supply consists of membership contributions.
 
j)    the service of caring for children by a creche or an after- school care centre.
 
k)   the supply of goods in the Republic by any person that is not a resident of the Republic by any person that is not a vendor, other than the supply of goods by an inbound duty and tax free shop, which have not been entered for home consumption: Provided that this paragraph shall not apply where such person applies in writing to the Commissioner, and the Commissioner, having regard to the circumstances of the case, directs that the provisions of this paragraph shall not apply to such person;";
 
l)    the supply of any goods or services by a bargaining council that is established in terms of section 27 of the Labour Relations Act, 1995 (Act No. 66 of 1995), to any of its members to the extent that the consideration for such supply consists of membership contributions;
 
m)  the supply of any goods or services by a political party registered in terms of section 15 of the Electoral Commission Act, 1996 (Act No. 51 of 1996), to any of its members to the extent that the consideration for such supply consists of membership contributions.
 
13. Collection of tax on importation of goods, determination of value thereof and exemptions from tax
 
1)   For the purposes of this Act goods shall be deemed to be

imported into the Republic on the date on which the goods are in terms of the provisions of the Customs and Excise Act deemed to be imported: Provided that-
 
i)    goods which are entered for home consumption in terms of the Customs and Excise Act, shall be deemed to have been imported on the date on which they are
so entered;
 
ii)   [deleted by the Revenue Laws Amendment Act No. 60 of 2008]
 
iii)  goods imported from or via Botswana, Lesotho, Swaziland or Namibia shall be declared and tax paid on entry into the Republic as prescribed by the Commissioner in Chapter XllA of the Rules under the Customs and Excise Act.
 
2)   For the purposes of this Act the value to be placed on the importation of goods into the Republic shall be deemed to be-
 
a)   where such goods are entered or are required to be entered for home consumption in terms of the Customs and Excise Act, the value thereof for customs duty purposes, plus any duty levied in terms of the said Act in respect of the importation of such goods, plus 10 per cent of the said value; or
 
b)   where such goods have their origin in Botswana, Lesotho, Swaziland or Namibia, and are imported from such a country, the amount of the value as contemplated in paragraph (a), except that such value shall not be increased by the factor of
10 per cent:
 
Provided that where the Minister has made a regulation determining the value of such goods for the purposes of this section, the greater of such determined value or the value declared on importation shall be used instead of the

 
 
 
 

                        

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value for customs purposes.
 
3)   The importation of the goods set forth in Schedule 1 to this
Act is exempt from the tax imposed in terms of section
7(1)(b):.
 
4)   *[deleted by Revenue Laws Amentment Act No. 32 of
2004].
 
5)   The Commissioner may make such arrangements as the
Commissioner may deem necessary-
 
a)   for the collection (in such manner as the Commissioner may determine) by-
 
i.    any officer performing his or her duties under the control, direction or supervision of the Commissioner; or
 
ii.   the Managing Director of the South African Post
Office Limited on behalf of the Commissioner;
 
of the tax payable in terms of this Act in respect of the importation of any goods into the Republic; and
 
b)   for the exchange of such information as is necessary for the carrying out of such arrangements.
 
6)   Subject to this Act, the provisions of the Customs and Excise Act relating to the importation, transit, coastwise carriage and clearance of goods and the payment and recovery of duty shall mutatis mutandis apply as if enacted in this Act, whether or not the said provisions apply for the purposes of any duty levied in terms of the Customs and Excise Act.
 
14. Collection of value-added tax on imported services, determination of value thereof and exemptions from tax
 
1)   Where tax is payable in terms of section 7(1)(c) in respect
of the supply of imported services the recipient shall within

30 days of the date referred to in subsection (2)-
 
a)   furnish the Commissioner with a declaration (in such form as the Commissioner may prescribe) containing such information as may be required; and
 
b)   calculate the tax payable on the value of the imported services at the rate of tax in force on the date of supply of the imported services and pay such tax to the Commissioner.
 
2)   For the purposes of this Act, a supply of imported services shall be deemed to take place at the time an invoice is issued by the supplier or recipient in respect of that supply or the time any payment is made by the recipient in respect of that supply, whichever time is the earlier.
 
3)   For the purposes of this Act, the value to be placed on the supply of imported services shall, save as otherwise provided in this section, be the value of the consideration for the supply, as determined in terms of section 10(3) or the open market value of the supply, whichever is the greater.
 
4)   Where a person carries on activities outside the Republic which do not form part of the activities of any enterprise carried on by him and in the course of such first-mentioned activities services are rendered for the purposes of such enterprise which, if rendered by anybody other than the
said person, would be imported services, such services shall for the purposes of section 7(1)(c) be deemed to be imported services supplied and received by that person in respect of such enterprise.
 
5)   The tax chargeable in terms of section 7(1)(c) shall not be payable in respect of-
 
a)   a supply which is chargeable with tax in terms of section 7(1)(a) at the rate provided in section 7;

 
 
 
 

                        

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b)   a supply which, if made in the Republic, would be charged with tax at the rate of zero per cent applicable in terms of section 11 or would be exempt from tax in terms of section 12.;
 
c)   a supply of an educational service by an educational institution established in an export country which is regulated by an educational authority in that export country; or
 
d)   a supply by a person of services as contemplated in terms of proviso (iii)(aa) to the definition of 'enterprise' in section 1.
 
15. Accounting basis
 
1)   Except as hereinafter provided, every vendor shall account for tax payable on an invoice basis for the purposes of section 16.
 
2)   Subject to the provisions of subsections (2A) and (3), the Commissioner may, on application in writing by a vendor, direct that the vendor account for the tax payable on a payments basis for the purposes of section 16 with effect from the vendor's registration in terms of this Act or, where he has accounted for tax payable on an invoice basis prior to making an application under this subsection, from the commencement of the tax period immediately following the tax period during which that direction is made by the Commissioner (hereinafter referred to as the changeover period), if-
 
a)   [repealed by section 26 of the Taxation Laws Second
Amendment Act No. 9 of 2007]
 
b)   the vendor is a natural person (other than the trustee of a trust fund) or an unincorporated body of persons of which all the members are natural persons, and-
 
i)    the total value of the vendor's taxable supplies in

the period of 12 months ending at the end of any tax period has not exceeded R2,5 million; or
 
ii)   the total value of the vendor's taxable supplies in the period of 12 months beginning on the first day of any month is not likely to exceed the amount specified in subparagraph (i):
 
Provided that the provisions of this Act relating to the determination of the value of any supply of goods or services, whether such supply is made before or on or after the commencement date, shall apply for the purposes of this subsection, but no regard shall be had to any tax charged in respect of such supply.
 
2A) Any vendor (other than a public authority or municipality) who in terms of subsection (2) accounts for tax payable on a payments basis shall, in respect of any supply made on or after 5 June 1997 of goods (other than fixed property) or services in respect of which the consideration in money is R100 000 or more, account for the tax payable on an invoice basis.
 
1.2) Where the Commissioner has under subsection (2) directed that a vendor account for tax payable on a payments basis, and-
 
b)   the vendor has ceased to satisfy the conditions of subsection (2) under which any such direction may be given, and-
 
i)    the vendor notifies the Commissioner thereof as required by section 25(c); or
ii)   the Commissioner is otherwise satisfied thereof; or c)   the vendor has made an application in writing to the
Commissioner to account for tax payable on an invoice
basis,

 
 
 
 

                        

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the Commissioner shall direct that the vendor account for the tax payable on an invoice basis with effect from the commencement of a future tax period or, where the vendor has failed to notify the Commissioner that he has ceased to satisfy the cinditions of subsection (2), as required by the said section 25(c), any tax period directed by the Commissioner: Provided that for the purposes of
paragraph (a) any such vendor shall not cease to satisfy the requirements of subsection (2) where the total value of the vendor's taxable supplies has exceeded or, as the case
may be, will exceed the amount specified for the purposes of subsection (2)(b) solely as a consequence of-
 
(aa) any cessation of or any substantial and permanent reduction in the size or scale of any enterprise carried on by the vendor, or
 
(bb)the replacement of any plant or other capital asset used in any enterprise carried on by the vendor, or
 
(cc) abnormal circumstances of a temporary nature.
 
1.3) Where a vendor changes from an invoice basis to a payments basis or from a payments basis to an invoice basis he shall furnish to the Commissioner particulars in the prescribed form calculating the tax payable or refundable in respect of the change in the basis of accounting.
 
1.4) Any vendor to whom subsection (4) applies shall, within the time allowed under this Act for the payment of tax in respect of the tax period immediately preceding the changeover period, pay to the Commissioner the tax payable as calculated in accordance with this section: Provided that where a vendor changes from payments basis to an invoice basis for the sole reason that such vendor is not a natural person (other than a trustee of a trust fund) or an

unincorporated body of persons of which all the members are natural persons, the vendor shall pay to the Commissioner the tax payable as calculated in accordance with this section in equal instalments within the period allowed under this Act for the payment of tax in respect of so many tax periods as the Commissioner may allow, the last of which shall not end on a date later than 1O March 1999.
 
1.5) Where a vendor changes from an invoice basis to a payments basis, the tax payable shall, for the purposes of subsection (5), be-
 
b)   an amount equal to the aggregate of the input tax deducted under section 16(3) in relation to the tax periods up to and including the tax period immediately preceding the changeover period, to the extent that that amount exceeds the aggregate amount of input tax that would have been deducted if the vendor had, for those tax periods, been accounting for tax payable on a payments basis,
 
reduced by-
 
c)   an amount equal to the aggregate of the output tax accounted for under section 16(3) in relation to the tax period up to and including the tax period immediately preceding the changeover period, to the extent that that amount exceeds the aggregate amount of output tax that would have been accounted for if the vendor had, for those tax periods, been accounting for tax payable on a payments basis.
 
1.6) Where a vendor changes from a payments basis to an invoice basis, the tax payable shall. for the purposes of subsection (5), be-
 
b)   an amount equal to the aggregate amount of output tax that would have been accounted for under section
16(3) if the vendor had, in relation to the tax periods up

 
 
 
 

                        

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to and including the tax period immediately preceding the changeover period, been accounting for tax payable on an invoice basis, to the extent that that amount exceeds the aggregate of the output tax accounted for in those tax periods,
 
reduced by-
 
c)   an amount equal to the aggregate amount of input tax that would have been deducted under section 16(3) if the vendor had, in relation to the tax periods up to and including the tax period immediately preceding the changeover period, been accounting for tax payable on an invoice basis, to the extent that that amount of input tax exceeds the aggregate amount of input tax deducted in those tax periods.
 
1.7) If, in relation to any particulars required to be furnished under subsection (4), the amount referred to in subsection (6)(b) exceeds the amount referred to in subsection (6)(a) or the amount referred to in subsection (7)(b) exceeds the amount referred to in subsection (7)(a), the amount of the excess shall be refundable to the vendor by the Commissioner in respect of the changeover period as provided in section 44(1), read with section 16(5).
 
1.8) Where a vendor's basis of accounting is changed as contemplated in subsection (2) or (3), the vendor shall prepare lists of debtors and creditors in relation to the vendor's enterprise showing the amounts owing by such debtors and the amounts owing to such creditors as at the end of the tax period immediately preceding the changeover period.
 
16. Calculation of tax payable
 
1)   The tax payable by a vendor shall be calculated by him in accordance with the provisions of this section in respect of each tax period during which he has carried on an

enterprise in respect of which he is registered or is required to be registered in terms of section 23: Provided that the Commissioner may authorise a vendor to calculate the tax payable in accordance with a method which the Minister may prescribe by regulation.
 
2)   No deduction of input tax in respect of a supply or the importation of any goods into the Republic, or any other deduction, shall be made in terms of this Act, unless-
 
a)   a tax invoice or debit note or credit note in relation to that supply has been provided in accordance with section 20 or 21 and is held by the vendor making that deduction at the time that any return in respect of that supply is furnished;
 
b)   a tax invoice is in terms of section 20(6) or (7) not required to be issued, or a debit note or credit note is in terms of section 21 not required to be issued;
 
c)   sufficient records are maintained as required by section
20(8) where the supply is a supply of second-hand goods or a supply of goods as contemplated in section
8(10) and in either case is a supply to which that section relates;
 
d)   a bill of entry or other document prescribed in terms of the Customs and Excise Act together with the receipt for the payment of the tax in relation to the said importation have been delivered in accordance with that Act and are held by the vendor making that deduction, or by his agent as contemplated in section
54(3)(b), at the time that any return in respect of that importation is furnished; or
 
e)   a tax invoice or debit or credit note has been provided as contemplated in section 54(2), and a statement as contemplated in section 54(3)(a) is held by the vendor at the time a return in respect of the supply to the

 
 
 
 

                        

98                         99


 

 

vendor is furnished; or
 
f)    the vendor, in any other case, is in possession of documentary proof, as is acceptable to the Commissioner, substantiating the vendor's entitlement to the deduction at the time a return in respect of the deduction is furnished:
 
i)    Provided that where a tax invoice or debit note or credit note in relation to that supply has been provided in accordance with this Act, or a bill of entry or other document has been delivered in accordance with the Customs and Excise Act, as the case may be, the Commissioner may determine that no deduction for input tax in relation to that supply or importation shall be made unless that tax invoice or debit note or credit note or that bill of entry or other document is retained in accordance with the provisions of section 55(3)
 
3)   Subject to the provisions of subsection (2) of this section and the provisions of sections 15 and 17, the amount of tax payable in respect of a tax period shall be calculated by deducting from the sum of the amounts of output tax of the vendor which are attributable to that period, as determined under subsection (4), and the amounts (if any) received by the vendor during that period by way of refunds of tax charged under section 7(1)(b) and (c) and 7(3)(a), the following amounts, namely-
 
a)   in the case of a vendor who is in terms of section 15 required to account for tax payable on an invoice basis,


 
ii)

tax period;
 
 
aa) in respect of supplies of second-hand goods to which paragraph (b) of the definition of "input tax" in section 1 applies (other than supplies in respect of which the provisions of
subparagraph (bb) apply), to the extent that payment of any consideration which has the effect of reducing or discharging any obligation (whether an existing obligation or an obligation which will arise in the future) relating to the purchase price for those supplies has been made during that tax period;
 
bb) in respect of supplies of second-hand goods to which paragraph (b) of the definition of 'input tax' in section 1 applies which consist of-
 
A)  fixed property in respect of the acquisition of which transfer duty is, in terms of the Transfer Duty Act, payable; or
 
B)  a share in a share block company in respect of the original issue or registration of transfer of which stamp duty is, in terms of the Stamp Duties Act, payable,
 
if the full or final amount of such transfer duty or stamp duty, as the case may be, has been paid during that tax period;

the amounts of input tax-
 
i)    in respect of supplies of goods and services (not being supplies of secondhand goods to which paragraph (b) of the definition of "input tax" in section 1 applies and supplies referred to in subparagraph (iiA)) made to the vendor during that

iiA) in respect of taxable supplies made to the vendor
under sales concluded on or after 6 June 1996 in respect of which the provisions of section 9(3)(d) apply (other than supplies in respect of which the provisions of section 10(4) apply), to the extent that payment of any consideration which has the effect of reducing or discharging any obligation (whether

 
 
 
 

                        

100

101


 

 

an existing obligation or an obligation which will arise in the future) relating to the purchase price for those supplies has been made during that tax period;
 
iii)  charged in terms of section 7(1)(b) in respect of goods imported into the Republic by the vendor and invoiced or paid, whichever is the earlier, during that tax period;
 
iv)  charged in terms of section 7(3)(a) in respect of goods subject to excise duty or environmental levy as contemplated in that section and invoiced or paid, whichever is the earlier, during that tax
period;
 
v)   calculated in accordance with section 21(2)(b) or
21(7) or section 22(1), 22(1A) or 22(4), as applicable to the vendor;
 
Provided that this paragraph does not apply where a vendor acquires goods or services that are to be awarded as a prize or winnings and in respect of which that vendor qualifies or will qualify for a deduction in terms of paragraph (d);
 
b)   in the case of a vendor who is in terms of section 15 required to account for tax payable on a payments basis, the amounts of input tax-
 
i)    in respect of supplies of goods and services made to the vendor in respect of which the provisions of section 9(1), (3)(a), (b) or (d) or (4) apply, to the extent that payments of any consideration which has the effect of reducing or discharging any obligation (whether an existing obligation or an obligation which will arise in the future) relating to the purchase price for those supplies have been made during that tax period;

aa)
 
bb)
 
ii)   charged in terms of section 7(1)(b) in respect of goods imported into the Republic by the vendor or in terms of section 7(3)(a) in respect of goods subject to excise duty or environmental levy as contemplated in that section and paid by the vendor during the tax period;
 
iii)  in respect of supplies of goods and services made to the vendor during the tax period, excluding supplies of goods and services to which subparagraph (i) of this paragraph applies;
 
iv)  calculated in accordance with section 21(2)(b) or
21(7), as applicable to the vendor, to the extent that payments in respect of the tax so calculated have been made during the tax period;
 
v)   calculated in accordance with section 22(1), as applicable to the vendor;
 
Provided that this paragraph does not apply where a vendor acquires goods or services that are to be awarded as a prize or winnings and in respect of which that vendor qualifies or will qualify for a deduction in terms of paragraph (d).
 
c)   an amount equal to the tax fraction of any payment made during the tax period by the vendor to indemnify another person in terms of any contract of insurance: Provided that this paragraph-
 
i)    shall only apply where the supply of that contract of insurance is a taxable supply or where the supply of that contract of insurance would have
been a taxable supply if the time of performance of that supply had been on or after the

 
 
 
 

                        

102

103


 

 

commencement date;
 
ii)   shall not apply where that payment is in respect of the supply of goods or services to the vendor or the importation of any goods by the vendor;
 
iii)  shall not apply where the supply of that contract of insurance is a supply charged with tax at the rate of zero per cent under section 11 and that other person is, at the time that that payment is made,
not a vendor and not a resident of the Republic;
 
iv)  shall not apply where that payment results from a supply of goods or services to that other person where those goods are situated outside the Republic or those services are physically performed elsewhere than in the Republic at the time of that supply;
 
d)   an amount equal to the tax fraction of any amount paid during the tax period by the supplier of the services contemplated in section 8(13) as a prize or winnings to the recipient of such services Provided that where the prize or winnings awarded constitutes either goods or services, the deduction must be limited to the input
tax on the initial cost of acquiring those goods or services;
 
dA) an amount equal to the tax fraction of any amount paid by the supplier of the services as contemplated in section 8(13) to the National Lottery Distribution Trust Fund, established by section 21 of the Lotteries Act,
1997 (Act No. 57 of 1997);
 
e)   an amount equal to the tax fraction of any amount of tax on totalizator transactions or tax on betting levied and paid for the benefit of any Provincial Revenue Fund by the supplier of the services contemplated in section
8(13);

f)    the amounts calculated in accordance with section
18(4) or (5) in relation to any goods or services applied during the tax period as contemplated in that section;
 
g)   any amount of input tax in relation to any supply or other deduction in respect of which subsection (2) of this section has operated to deny a deduction and the vendor has obtained, during the tax period, the prescribed documents or records in relation to that supply;
 
h)   in the case of a vendor who has supplied goods or services during that tax period, otherwise than in terms of section 18(2), an amount determined in accordance with the formula
 
A x B x C
 
in which formula-
 
"A" represents the tax fraction;
 
"B" represents the lesser of- i)
aa) the adjusted cost (including any tax forming part of such adjusted cost) to the vendor of the acquisition, manufacture, assembly, construction or production of those goods or services: Provided that where the goods or services were acquired under a supply in respect of which the consideration in money was in terms of section 10(4) deemed to be
the open market value of the supply, the adjusted cost of those goods or services shall be deemed to include such open market value to the extent that it exceeds the consideration in money for that supply;

 
 
 
 

                        

104

105


 

 

or
 
bb) where the vendor was at some time after the acquisition of such goods or services deemed under section 18(4) to have been supplied with such goods or services, the amount which was represented by "B" in the formula
contemplated in section 18(4) when such
goods or services were deemed to be supplied to the vendor; or
 
cc) where the vendor was at some time after the acquisition of such goods or services required to make an adjustment contemplated in section
18(2) or (5), the amounts then represented by
"A" in the formula contemplated in section
10(9) or "B" in the formula contemplated in section 18(5) respectively, in the most recent adjustment made in terms of section 18(2) or
(5) by the vendor prior to such supply of goods or services; and
 
ii)   the open market value of the supply of those goods or services at the time those goods or services are deemed to be supplied; and
 
"C" represents the percentage that, immediately before the time of the supply, the use or application of the goods or services for the purpose other than that of making taxable supplies was of the total use or application of the goods or services:
 
Provided that- i)
ii)   this subsection does not apply where-
 
aa) such goods or services were acquired before 1
April 2005, or an input tax deduction in respect

of that acquisition was denied under proviso
(iv) to section 18(4); and
 
bb) the vendor is a public authority which
registered prior to 1 April 2005, notwithstanding paragraph (b)(i) of 'enterprise' in section 1 or a public entity listed in PartAor C of Schedule 3
to the Public Finance Management Act, 1999 (Act No. 1 of 1999); or
 
iii)  this subsection does not apply where such goods or services were acquired by a municipality before
1 July 2006, or an input tax deduction in respect of that acquisition was denied in terms of paragraph (v) of the proviso to section 18(4);
 
i)    an amount equal to the tax fraction of any payment made by the vendor during the tax period in respect of the redemption with him, or his agent, of the monetary value of any token, voucher or stamp contemplated in section 10(20), to a supplier of goods or services who has granted a discount on the surrender to him of such token, voucher or stamp by a recipient of a supply of goods or services;
 
j)
 
i)    in the case of a vendor who has, during the tax period, supplied a property in possession in the course or furtherance of his enterprise under a sale, an amount equal to the tax fraction of the lesser of-
 
aa) the amount (excluding any amount of tax) received in respect of the sale of such property in possession less any amount paid by the vendor in respect of the acquisition of such property in possession; and
 
bb) the amount of the unrecovered loan balance

 
 
 
 

                        

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107


 

 

less any amount paid by the vendor in respect of the acquisition of such property in possession:
 
Provided that no deduction shall be made in terms of this paragraph where the person in default is or will be held liable for payment of such lesser amount;
 
ii)   for the purposes of this paragraph-
 
aa) 'property in possession' means fixed property acquired by any vendor-
 
A)  at a sale in execution as a result of default by any person (other than a person held or applied such fixed property for the purpose of making taxable supplies in the course or furtherance of his enterprise immediately before such sale in execution) in respect of an unrecovered loan balance due to that vendor in terms of a credit agreement; or
 
B)  as a result of an abandonment authorised by the Master of the High Court where such person has defaulted in respect of an unrecovered loan balance due to that vendor in terms of a credit agreement or gone insolvent;
 
bb) 'unrecovered loan balance' means the amount of capital, interest and administrative holding costs outstanding in terms of a credit agreement at the date of sale in execution or the date of authorisation or abandonment by the Master of the High Court:
 
Provided that where any vendor is entitled under the preceding provisions of this subsection to deduct any amount in respect of any tax period

from the said sum, the vendor may deduct that amount from the amount of output tax attributable to a later tax period which ends no later than five years after the end of the tax period during which the vendor for the first time became entitled to such deduction and to the extent that it has not
previously been deducted by the vendor under this subsection:
 
Provided further that the amount of input tax which, in relation to any supply of goods or services to a vendor, the vendor may deduct in respect of any payment referred to in paragraph (a)(ii) or (b)(i) of
this subsection, shall be an amount which bears to the full amount of the input tax relating to that supply the same ratio as the amount of the payment bears to the full value on which tax was payable in respect of the supply.
 
k)   an amount of input tax as determined by the Commissioner paid by a vendor to a supplier of pastoral, agricultural or other farming products who is not a vendor, in terms of a scheme operated by the controlling body of an industry for the development of small-scale farmers approved by the Minister with the concurrence of the Minister of Agriculture and Land Affairs to compensate that supplier for tax incurred in the production of such goods.
 
l)    an amount as determined by the Commissioner in lieu of a refund in respect of the purchase and use of diesel paid by a vendor to a supplier of pastoral, agricultural
or other farming products who is not a vendor, in terms of a scheme operated by the controlling body of an industry for the development of small-scale farmers approved by the Minister with the concurrence of the Minister of Agriculture and Land Affairs to compensate

 
 
 
 

                        

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that supplier for an amount refundable in the production of such goods;
 
m)  an amount equal to the tax fraction initially applied to any excess amount contemplated in section 8(27) which is refunded by the vendor during the tax period;
 
n)   an amount equal to the tax fraction of the lesser of the amount contemplated in section 10(25) or the open market value of the movable goods on the date-
 
i)    those goods are returned to the customs controlled area enterprise or IDZ operator; or
 
ii)   those goods are supplied by the customs controlled area enterprise or IDZ operator where those goods are supplied after the relevant prescribed time period contemplated in section
8(24): Provided that-
i)    where any vendor is entitled under the preceding provisions of this subsection to deduct any amount in respect of any tax period from the said sum, the vendor may deduct that amount from the amount
of output tax attributable to a later tax period which ends no later than five years after the end of the tax period during which-
 
aa) the tax invoice for that supply should have been issued as contemplated in section 20(1);
 
bb) goods were entered for home consumption in terms of the Customs and Excise Act;
 
cc) second-hand goods were acquired or goods as contemplated in section 8(10) were repossessed;
 
dd) the agent should have notified the principal as

contemplated in section 54(3); or
 
ee) in any other case, the vendor for the first time became entitled to such deduction, notwithstanding the documentary proof that
the vendor must be in possession of in terms of subsection (2) of this section; and
 
ii)   the said period of five years contemplated in proviso (1) of this section shall be limited to six months prior to the tax period in which the deduction is made, where the Commissioner is satisfied that the deduction was not permissible in accordance with the practice generally prevailing,
 
and to the extent that it has not previously been deducted by the vendor under this subsection.
 
4)   For the purposes of subsection (3), output tax in relation to a supply made by a vendor shall be attributable to a tax period-
 
a)   in the case of a vendor who is in terms of section
15 required to account for tax payable on an invoice basis-
 
i)    subject to the provisions of subparagraph (ii), where a supply is made or is deemed to be made by him during that tax period;
 
ii)   where a supply is made under a sale concluded on or after 6 June 1996 in respect of which the provisions of section 9(3)(d) apply (other than a supply in respect of which the provisions of section 10(4) apply), to the extent that payment of any consideration which has the effect of reducing or discharging any obligation (whether an existing obligation or an obligation which will
arise in the future) relating to the purchase price for

 
 
 
 

                        

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that supply has been made during that tax period;
or
 
b)   in the case of a vendor who is in terms of section 15 required to account for tax payable on a payments basis-
 
i)    to the extent that payment of any consideration which has the effect of reducing or discharging any obligation (whether an existing obligation or an obligation which will arise in the future) relating to the purchase price has been received by the
vendor during that tax period for any supply of goods or services in respect of which the provisions of section 9(1), (3)(a), (b) or (d) or (4) or
21(2)(a) or (6) apply (other than a supply in respect of which the provisions of section 10(4) apply);
 
ii)   where a supply of goods or services is made or deemed to be made during the tax period by that vendor, not being a supply of goods or services
to which subparagraph (i) of this paragraph applies.
 
5)   If, in relation to any tax period of any vendor, the aggregate of the amounts that may be deducted under subsection (3) from the sum referred to in that subsection, the amount (if any) refundable to the vendor under section 15(8), the amount (if any) brought forward from the tax period preceding the first-mentioned tax period as Provided in paragraph (ii) of the proviso to section 44(1) and the
amount (if any) credited under section 44(4) to the vendor's account during the first-mentioned tax period, exceeds the said sum, the amount of the excess shall, subject to the provisions of this Act, be refundable to the vendor by the Commissioner as provided in section 44(1).

17. Permissible deductions in respect of input tax
 
1)   Where goods or services are acquired or imported by a vendor partly for consumption, use or supply (hereinafter referred to as the intended use) in the course of making taxable supplies and partly for another intended use, the extent to which any tax which has become payable in respect of the supply to the vendor or the importation by the vendor, as the case may be, of such goods or services or in respect of such goods under section 7(3) or any amount determined in accordance with paragraph (b) or (c)
of the definition of "input tax" in section 1, is input tax, shall be an amount which bears to the full amount of such tax or amount, as the case may be, the same ratio (as determined by the Commissioner in accordance with a ruling as contemplated in section 41A or 41B) as the intended use of such goods or services in the course of making taxable supplies bears to the total intended use of such goods or services: Provided that-
 
i)    where the intended use of goods or services in the course of making taxable supplies is equal to not less than 95 per cent of the total intended use of such goods or services, the goods or services concerned may for the purposes of this Act be regarded as having been acquired wholly for the purpose of making
taxable supplies;
 
ii)   where goods or services are deemed by section 9(3)(b) to be successively supplied, the extent to which the tax relating to any payment referred to in that section is input tax may be estimated where the calculation cannot be made accurately until the completion of the supply of the goods or services, and in such case such estimate shall be adjusted on completion of the supply, any amount of input tax which has been overestimated being accounted for as output tax in the tax period

 
 
 
 

                        

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during which the completion occurs and any amount of input tax which has been underestimated being accounted for as input tax in that period; and
 
iii)  where a method for determining the ratio referred to in this subsection had been approved by the Commissioner, that method may only be changed with effect from a future tax period, or from such other date as the Commissioner may consider equitable.
 
2)   Notwithstanding anything in this Act to the contrary, a vendor, shall not be entitled to deduct from the sum of the amounts of output tax and refunds contemplated in section
16(3), any amount of input tax-
 
a)   in respect of goods or services acquired by such vendor to the extent that such goods or services are acquired for the purposes of entertainment: Provided that this paragraph shall not apply where-
 
i)    such goods or services are acquired by the vendor for making taxable supplies of entertainment in the ordinary course of an enterprise which-
 
aa) continuously or regularly supplies entertainment to clients or customers (other than in the circumstances contemplated in item (bb)) for a consideration to the extent that such taxable supplies of entertainment are made for
a charge which-
 
A)  covers all direct and indirect costs of such entertainment; or
 
B)  is equal to the open market value of such supply of entertainment,
 
unless-

i)    such costs or open market value is for bona fide promotion purposes not charged by the vendor in respect of the supply to recipients who are clients or customers in the ordinary course of the enterprise, of entertainment which is in all respects similar to the entertainment countinuously or regularly supplied to clients or customers for consideration; or
 
ii)   the goods or services were acquired by the vendor for purposes of making taxable supplies to such
clients or customers of entertainment which consists of the provision of
any food and a supply of any portion of such food is subsequently made
to any employee of the vendor or to any welfare organisation as all such food was not consumed in the course of making such taxable supplies;
 
bb) supplies entertainment to any employee or office holder of the vendor or any connected person in relation to the vendor, to the extent that such taxable supplies of entertainment are made for a charge which covers all direct and indirect costs of such entertainment;
 
ii)   such goods or services are acquired by the vendor for the consumption or enjoyment by that vendor (including, where the vendor is a partnership, a member of such partnership), an employee, office holder of such vendor, or a self-employed natural person in respect of a meal, refreshment or

 
 
 
 

                        

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accommodation, in respect of any night that such vendor or member is by reason of the vendor's enterprise or, in the case of such employee, office holder or self-employed natural person, he or she is by reason of the duties of his or her employment, office or contractual relationship, obliged to spend away from his or her usual place of residence and from his or her usual working-place. For the purposes of this section, the term 'self-employed natural person' shall mean a person to whom an amount is paid or is payable in the course of any trade carried on by him or her independently of the person by whom such amount is paid or payable and of the person to whom the services have been or are to be rendered, as contemplated in the proviso to paragraph (ii) of the exclusions to the definition of 'remuneration' in paragraph 1 of the Fourth Schedule to the Income Tax Act;
 
iii)  such goods or services consist of a meal or refreshment supplied by the vendor as operator of any conveyance to a passenger or crew member, in such conveyance during a journey, where such
meal or refreshment is supplied as part of or in conjunction with the transport service supplied by the vendor, where the supply of such transport service is a taxable supply;
 
iv)  such goods or services consist of a meal or refreshment supplied by the vendor as organizer of a seminar or similar event to a participant in such seminar or similar event, the supply of such meal or refreshment is made during the course of or immediately before or after such seminar or similar event and a charge which covers the cost of such meal or refreshment is made by the vendor to the recipient;

v)   such goods or services are acquired by a municipality for the purpose of providing sporting or recreational facilities or public amenities to the public;
 
vi)  such goods or services are acquired by a welfare organization, for the purpose of making supplies in the furtherance of its aims and objects;
 
vii) such goods or services are acquired by a vendor for an employee or office holder of such vendor, that are incidental to the admission into a medical care facility;
 
viii) such goods or services consist of a meal or refreshment supplied by the vendor as operator of any ship or vessel (otherwise than in the circumstances contemplated in subparagraph (iii)) in such ship or vessel to a crew member of such ship or vessel, where such meal or refreshment is supplied in the course of making a taxable supply by that vendor; or
 
ix)  that entertainment is acquired by the vendor for the purpose of awarding that entertainment as a prize contemplated in section 16(3)(d) in consequence of a supply contemplated in section
8(13);
 
b)   in respect of any fees or subscriptions paid by the vendor in respect of membership of any club, association or society of a sporting, social or recreational nature; or
 
c)   in respect of any motor car supplied to or imported by the vendor: Provided that-
 
i)    this paragraph shall not apply where that motor car is acquired by the vendor exclusively for the purpose of making a taxable supply of that motor

 
 
 
 

                        

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car in the ordinary course of an enterprise which continuously or regularly supplies motor cars, whether that supply is made by way of sale or under an instalment credit agreement or by way of rental agreement at an economic rental consideration:;
 
ii)   for the purposes of this paragraph a motor car acquired by such vendor for demonstration purposes or for temporary use prior to a taxable supply by such vendor shall be deemed to be acquired exclusively for the purpose of making a taxable supply; and
 
iii)  this paragraph shall not apply where-
 
aa) that motor car is acquired by the vendor for the purposes of awarding that motor car as a prize contemplated in section 16(3)(d) in consequence of a supply contemplated in section 8(13); or
 
bb) the supply of that motor car is in the ordinary course of an enterprise which continuously or regularly supplies motor cars as prizes to clients or customers (other than to any employee or office holder of the vendor or any connected person in relation to that employee,
office holder or vendor) to the extent that it is in consequence of a taxable supply made in the course or furtherance of an enterprise;
 
d)   in respect of any goods or services acquired by a superannuation scheme referred to in section 2, for the purposes of the supply by such scheme of any medical or dental services or services directly connected with such medical or dental services or of any goods necessary for or subordinate or incidental to the supply of any such services.

e)   Deleted by section 123 of Act 32 of 2004:
 
2A) Subsection (2) shall not apply to input tax in respect of goods or services that are applied in the course or furtherance of a foreign donor funded project.
 
3)   Notwithstanding anything in section 16(4) , where a vendor has made a supply of goods as contemplated in section
8(10) and in respect of the acquisition thereof by the vendor a deduction of input tax under section 16(3) was denied in terms of subsection (2) of this section, the vendor shall not be required to account for output tax in relation to such supply.
 
4)   Where, but for the provisions of this subsection, an amount qualifies or has qualified for a deduction under more than one provision of this Act, a deduction of such amount, or any portion thereof, shall not be made more than once in the calculation of the amount of tax payable by any person.
 
18. Change in use adjustments
 
1)   Subject to the provisions of section 8(2), where-
 
a)   goods or services have been supplied to or imported by a vendor; or
 
b)   goods have been manufactured, assembled, constructed or produced by him;
 
c)   goods or services were deemed by subsection (4) to have been supplied to him,
 
(excluding goods or services to the extent that, in respect of the acquisition of which by the vendor a deduction of input tax was denied by section 17(2) or would have been denied if that section had been applicable prior to the commencement date) and such goods or services were acquired, manufactured, assembled, constructed or

 
 
 
 

                        

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produced by such vendor wholly or partly for the purpose of consumption, use or supply in the course of making taxable supplies or such goods were held or applied for that purpose, such goods or services shall-
 
i)    if they are subsequently applied by him (otherwise than in the circumstances contemplated in section
8(9) ) wholly for a purpose other than the said purpose; or
 
ii)   if they are subsequently applied by him wholly for a purpose in respect of which, if such goods or services had been acquired by him at the time of such application, a deduction of input tax would have been denied in terms of section 17(2)(a) or (c),
 
be deemed to have been supplied by him by way of a taxable supply by him in the course of his enterprise.
 
2)   Where-
 
a)   capital goods or services have been supplied to or imported by a vendor; or
 
b)   capital goods have been manufactured, assembled, constructed or produced by him; or
 
c)   capital goods or services were deemed by subsection
(4) to have been supplied to him,
 
(excluding goods or services to the extent that, in respect of the acquisition of which by the vendor a deduction of input tax was denied by section 17(2) or would have been denied if that section had been applicable prior to the commencement date) and such goods or services were acquired. manufactured, assembled, constructed or produced by such vendor wholly or partly for the purpose of consumption, use or supply in the course of making taxable supplies or such goods were held or applied for

that purpose, such goods or services shall, if the extent of the application or use of such goods or services in the course of making taxable supplies (in respect of which, if such goods or services had been acquired at the time of such application or use, a deduction of input tax would not have been denied in terms of section 17(2)(a)) is subsequently reduced in relation to their total application or use, be deemed to have been supplied by him by way of a taxable supply by him in the course of his enterprise at the time at which such reduction is deemed by subsection (6)
to take place: Provided that this subsection does not apply to-
 
i)    capital goods or services which have an adjusted cost of less than R40 000 (excluding tax) or where such goods or services were deemed to be supplied to the vendor by subsection (4) if the amount which was represented by "B" in the formula contemplated in that subsection was less than R40 000 when such goods or services were deemed to be supplied to such vendor;
 
ii)   capital goods or services acquired by a public authority or public entity listed in Part A or C of Schedule 3 to the Public Finance Management Act,
1999 (Act No. 1 of 1999), if the goods or services were acquired prior to 1 April 2005 or if an input tax deduction in respect thereof was denied under proviso (iv) to section 18(4); or
 
iii)  capital goods or services acquired by a municipality, if the goods or services were acquired prior to 1 July 2006 or if an input tax deduction in respect thereof was denied in terms of paragraph (v) of the proviso to section 18(4).
 
3)   Notwithstanding anything in this section, to the extent that any vendor has or is deemed to have granted a benefit or

 
 
 
 

                        

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advantage to an employee or the holder of any office as contemplated in paragraph (i) of the definition of "gross income" in section 1 of the Income Tax Act, read with the Seventh Schedule to that Act, and such benefit or advantage consists of a supply of goods or services, the granting of that benefit or advantage shall be deemed to be a supply of goods or services made by the vendor in the course of an enterprise carried on by the vendor: Provided that this subsection shall not apply to any such benefit or advantage to the extent that it has arisen by virtue of any supply of goods or services which is an exempt supply in terms of section 12 of this Act or is a supply which is charged with tax at the rate of zero per cent in terms of section 11 of this Act or is a supply of entertainment : Provided further that this subsection shall not apply to any such benefit or advantage to the extent that it is granted by the vendor in the course of making exempt supplies.
 
4)   Where- a)
i)    goods or services have been supplied to or imported by a person prior to the commencement date; or
 
ii)   goods have been manufactured, assembled, constructed or produced by him prior to the commencement date,
 
and such goods or services were acquired, manufactured, assembled, constructed or produced or applied by such person wholly for purposes other than that of consumption, use or supply in the course of making supplies in the course of an activity which was an enterprise or would have been an enterprise if section 1 had been applicable prior to the date of promulgation of this Act or for a purpose in respect of which a deduction of input tax in respect of such

goods or services would have been denied in terms of section 17(2) if that section had been applicable prior to the commencement date; or
 
b)
 
i)    goods or services have been supplied to or imported by a person on or after the commencement date and tax has been charged in respect of such supply or importation; or
 
ii)   goods have been manufactured, assembled, constructed or produced by him on or after the commencement date and tax has been charged in respect of the supply of goods or services acquired by him for the purpose of such manufacturing, assembling, construction or production; or
 
iii)  goods or services are deemed by subsection (1) or section 8(2) to have been supplied by him,
 
and no deduction has been made in terms of section
16(3) in respect of or in relation to such goods or services; or
 
c)   second-hand goods situated in the Republic have been supplied (otherwise than under a taxable supply) to a person under a sale on or after the commencement
date by a resident of the Republic and no deduction has been made in terms of section 16(3) in respect of such second-hand goods; and
 
such goods or services are subsequent to the commencement date applied in any tax period by that person or, where he is a member of a partnership, by the partnership, wholly or partly for consumption, use or supply in the course of making taxable supplies (other than
taxable supplies in respect of which, if such goods or services had been acquired at the time of such application, a deduction of input tax would have been denied in terms

 
 
 
 

                        

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of section 17(2)), those goods or services shall be deemed to be supplied in that tax period to that person or the partnership, as the case may be, and the Commissioner shall allow that person or the partnership, as the case may be, to make a deduction in terms of section 16(3) of an amount determined in accordance with the formula
 
A x B x C x D
 
in which formula-
 
"A" represents the tax fraction;
 
"B" represents the lesser of-
 
i)    the adjusted cost (including any tax forming part of such adjusted cost) to the vendor of the acquisition, manufacture, construction or production of those goods or services: Provided that where the goods or services
were acquired under a supply in respect of which the consideration in money was in terms of section 10(4) deemed to be the open market value of the supply, the adjusted cost of those goods or services shall be deemed to include such open market value to the extent that it exceeds the consideration in money for that supply; or
 
ii)   the open market value of the supply of those goods or services at the time when the supply is deemed to be made;
 
: Provided that where that person or partnership has previously deregistered as a vendor in terms of section 8(2) and where section 8(2C) is applicable, the amount determined in paragraph (i) or (ii) must be reduced by R100 000.

"C" represents the ratio that, immediately after the supply so deemed to be made, the intended use of the goods or services (as contemplated in section
17(1)) in the course of making taxable supplies (other than taxable supplies in respect of which, if such goods or services had been acquired at the time of such application, a deduction of input tax would
have been denied in terms of section 17(2)) bears to the total intended use of those goods or services, expressed as a percentage: Provided that where the intended use of goods or services in the course of making taxable supplies (other than taxable supplies in respect of which, if such goods or services had been acquired at the time of such application, a deduction of input tax would have been denied in terms of section 17(2)) is equal to not less than 95 per cent of the total intended use of such goods or services such percentage shall be deemed to be
100 per cent; and
 
"D" where paragraph (c) applies, other than in respect of second-hand goods to which the proviso to paragraph (b) of the definition of 'input tax' in section 1 applies, represents the ratio that the amount paid, which payment reduces or discharges any obligation (whether an existing obligation or an obligation which will arise in the future) in respect of or consequent
upon, whether directly or indirectly, the consideration in money for the supply of second-hand goods, bears to the total consideration in money, expressed as a percentage:
 
Provided that-
 
i)    paragraph (b) of this subsection shall not apply where a vendor has, only as a result of not complying with the provisions of section 16(2), not

 
 
 
 

                        

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ii)
 
 
 
 
iii)

been entitled to make a deduction of input tax in terms of section 16(3);
 
 
aa)
 
bb)
 
 
aa)
 
bb)

assembled, constructed or produced or applied by such vendor partly for the purpose of consumption, use or supply in the course of making taxable supplies (other than taxable supplies in respect of which, if such goods or services had been acquired at the time of such application, a deduction of input tax would have been denied in terms of section 17(2)) or of making supplies in the course of an activity which was an enterprise or would have been an
enterprise if section 1 had been applicable prior to the date of promulgation of this Act (other than supplies in respect
of which, if such goods or services had been acquired at
the time of such application, a deduction of input tax would

iv)  this subsection shall not apply where a constitutional institution listed in Schedule 1 or a public entity listed in Part A or C of Schedule 3 to the Public Finance Management Act, 1999 (Act No.
1 of 1999), is re-classified within the Schedules to the Public Finance Management Act, 1999 (Act No.
1 of 1999) and applies those goods or services for the purposes of consumption, use or supply in the course of making taxable supplies; or
 
v)   this subsection shall not apply where a municipality applies goods or services acquired before 1 July
2006 for the purposes of consumption, use or supply in the course of making taxable supplies on or after 1 July 2006.
 
5)   Where-
 
a)   capital goods or services have been supplied to or imported by a vendor; or
 
b)   capital goods have been manufactured, assembled, constructed or produced by him; or
 
c)   capital goods or services are deemed by subsection (4)
to have been supplied to him,
 
and such goods or services were acquired, manufactured,

have been denied in terms of section 17(2) if that section had been applicable prior to the commencement date)
such goods or services shall, if the extent of the application or use of such goods or services in the course of making taxable supplies (other than taxable supplies in respect of which, if such goods or services had been acquired at the time of such application, a deduction of input tax would have been denied in terms of section 17(2)) is subsequent
to the commencement date increased in relation to their total application or use, be deemed to be supplied to him, and the Commissioner shall allow the vendor to make a deduction in terms of section 16(3), in the tax period during which such increase is deemed by subsection (6) to take place, of an amount determined in accordance with the formula
 
A x B x (C - 0)
 
in which formula-
 
"A" represents the tax fraction;
 
"B" represents the lesser of- i)
aa) the adjusted cost (including any tax

 
 
 
 

                        

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forming part of such adjusted cost) to
the vendor of the acquisition, manufacture, assembly, construction or production of those goods or services: Provided that where the goods or services were
acquired under a supply in respect of which the consideration in money was in terms of section 10(4) deemed to be the open market value of the supply, the adjusted cost of those goods or services shall be deemed to include such open market value to the extent that it
exceeds the consideration in money for that supply;
 
bb) where goods or services were deemed by subsection (4) to have been supplied to the vendor, the amount which was represented by "B" in the formula contemplated in that subsection when such goods or services were deemed to be supplied to the vendor; or
 
cc) where the vendor was at some time after the acquisition of the goods or services required to make an adjustment contemplated in subsection (2) or this subsection the amounts represented by "A" In the formula contemplated in section 10(9) or by "B" in the formula contemplated in this subsection
respectively, in the most recent adjustment made under subsection (2) or this subsection by the vendor prior to such supply of goods or services so deemed to be made; and
 
ii)   the open market value of the supply of those

goods or services at the time any increase in the extent of the use or application of the goods or services is deemed by subsection (6) to take place;
 
"C" represents the percentage that, during the 12 month period during which the increase in use or application of the goods or services is deemed to take place, the use or application of the goods or services for the purposes of making taxable supplies (other
than taxable supplies in respect of which, if such goods or services had been acquired at the time of such application, a deduction of input tax would
have been denied in terms of section 17(2)) was of the total use or application of the goods: Provided that where the said percentage does not exceed the percentage contemplated in "D" by more than 10 per cent of the total use or application, the said percentage shall be deemed to be the percentage determined in "D";
 
"D" represents the percentage that the use or application of the goods or services for the purposes of making taxable supplies (other than taxable supplies in respect of which, if such goods or services had been acquired at the time of such application, a deduction of input tax would have been denied in terms of section
17(2)) was of the total use or application of such goods or services determined in terms of section 17(1), section 10(9) or subsection (4) of this section or this subsection, whichever was applicable in the period immediately preceding the 12 month period contemplated in "C":
 
Provided that-
 
i)    this subsection does not apply to-
 
aa) capital goods or services which cost less than

 
 
 
 

                        

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R40 000 (excluding tax) or where such goods or services were deemed to be supplied to the person by subsection (4) if the amount which was represented by "B" in the formula contemplated in that subsection was less than R40 000 when such goods or services were deemed to be supplied to such person;
 
bb) capital goods or services acquired by a public authority or public entity listed in Part A or C of Schedule 3 to the Public Finance Management Act, 1999 (Act No. 1 of 1999), prior to 1 April
2005, or if an input tax deduction in respect thereof was denied under proviso (iv) to section
18(4); or
 
cc) capital goods or services acquired by a municipality prior to 1 July 2006, or if an input tax deduction in respect thereof was denied in terms of paragraph (v) of the proviso to section
18(4);
 
ii)   where the capital goods or services consist of secon-hand goods contemplated in the proviso to paragraph (b) of the definition of 'input tax' in section 1, the amount determined in terms of this subsection shall not exceed the amount of transfer duty ot stamp duty, as the case may be, which is or would have been payable, less any amount which has previously been deducted in terms of the provisions of section 16(3)(a)(ii) or (b)(i), or subsection (4) of this section, in respect of that acquisition, original issue or registration of transfer, as the case may be.
 
6)   For the purposes of subsections (2) and (5), any reduction or increase in the extent of the application or use of goods or services shall be deemed to take place on the last day of

the vendor's year of assessment as defined in section 1 of the Income Tax Act or, if the vendor is not a taxpayer as defined in that section, on the last day of February: Provided that where a vendor who is not a taxpayer as so defined draws up annual financial statements in respect of a year or other period ending on a date other than the last day of February the reduction or increase in the extent of the application or use of goods or services shall be deemed to take place on such first-mentioned date:
 
Provided further that where a vendor ceases to be a vendor prior to any day contemplated in this subsection, any reduction or increase in the extent of the application or use of goods or services shall be deemed to take place immediately before that vendor ceased to be a vendor.
 
7)   For the purposes of subsections (2) and (5) of this section, the extent of the application or use of any goods or services for the purpose of making taxable supplies shall be determined with reference to the application or use of such goods or services during the 12 month period ending on the day any reduction or increase in the extent of the application or use of such goods or services is deemed by subsection (6) to have taken place: Provided that where any goods or services are acquired, manufactured, assembled, constructed or produced by a vendor or are
deemed under subsection (4) to have been supplied to that vendor during such 12 month period, the extent of the application or use of such goods or services shall be determined with reference to the period ending on the day contemplated in subsection (6) and commencing on the date such goods or services are acquired, manufactured, assembled, constructed or produced by the vendor or are deemed to be supplied to the vendor under subsection (4): Provided further that where the period between the commencement date and the date contemplated in subsection (6) is less than a 12 month period it shall for the

 
 
 
 

                        

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purposes of this section be deemed to be a 12 month period.
 
8)   Where a deduction of an amount contemplated in paragraph (b) of the definition of "input tax" in section 1 has been made by any vendor in respect of the sale to him of any second-hand goods and subsequently-
 
a)   that sale is cancelled; or
 
b)   the nature of that sale is fundamentally varied or altered; or
 
c)   the previously agreed consideration for that sale is reduced; or
 
d)   the second-hand goods or part of the second-hand goods sold are returned to the supplier,
 
and, as a result of the occurrence of one or more of the abovementioned events, the input tax actually deducted in relation to such sale exceeds the input tax properly deductible by the vendor, either the amount of that excess shall be deemed to be tax charged in relation to a taxable supply made by that vendor in the tax period during which the said event has occurred, at the rate of tax which applied when the said deduction was made, or the amount of input tax deducted in terms of section 16(3) in the said tax period shall be reduced by the amount of the said excess.
 
9)   Where a vendor has acquired or imported a motor car (in respect of which input tax has been denied in terms of section 17(2)(c)) and has subsequently converted that motor car into a game viewing vehicle or a hearse, as contemplated in paragraph (e) or (f) of the definition of
'motorcar' in section 1, that motor car is deemed to be supplied in that tax period to that vendor, and the Commissioner shall allow that vendor to make a deduction in terms of section 16(3) of an amount equal to the tax

fraction of the lesser of- a)   the adjusted cost; or
b)   the open market value,
 
of that motor car on the day before that conversion: Provided that this deduction excludes any amount of input tax which qualifies or has qualified for a deduction under another provision of this Act.
 
10) Where-
 
a)   goods or services have been supplied by a vendor at the zero rate in terms of sections 11(1)(c), 11(1)(m),
11(1)(mA) or 11(2)(k) to a vendor that is a customs controlled area enterprise or an IDZ operator; or
 
b)   goods have been imported into the Republic by a vendor, being a customs controlled area enterprise or an IDZ operator and those goods are exempt from tax in terms of section 13(3),
 
and where a deduction of input tax would have been denied in terms of section 17(2), or to the extent that such goods or services are not wholly for consumption, use or supply within a customs controlled area in the course of making taxable supplies by that vendor, that is
a customs controlled area enterprise or an IDZ operator, those goods or services shall be deemed to be supplied by the vendor concerned in the same tax period in
which they were so acquired, in accordance with the formula:
 
A x B
 
in which formula-
 
'A' represents the rate of tax levied in terms of section 7(1);
and

 
 
 
 

                        

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'B' represents-
 
i)    the cost to the vendor of the acquisition of those goods or services which were supplied to him or her in terms of sections 11(1)(c),
11(1)(m), 11(1)(mA) or 11(2)(k); or
 
ii)   the value to be placed on the importation of goods into the Republic as determined in terms of section 13(2).
 
18A. Adjustments in consequence of acquisition of going concern wholly or partly for purposes other than making taxable supplies
 
1)   Where-
 
a)   an enterprise or part of an enterprise has been supplied to any vendor; and
 
b)   the supply of such enterprise or part was charged with tax at the rate of zero per cent in terms of section
11(1)(e); and
 
c)   such enterprise or part, as the case may be, or any goods or services which formed part of such enterprise or part are acquired by such vendor wholly or partly for a purpose other than for consumption, use or supply in the course of making taxable supplies,
 
such enterprise, part, goods or services, as the case may be, shall be deemed to have been supplied by him by way of a taxable supply by him in the course of his enterprise: Provided that where the intended use of such enterprise, part, goods or services, as the case may be, in the course of making taxable supplies is equal to not less than 95 per cent of the total intended use of such enterprise, part, goods or services, as the case may be, the enterprise, part, goods or services concerned may for the purposes of this Act be regarded as having been acquired wholly for the

purpose of consumption, use or supply in the course of making taxable supplies.
 
2)   Notwithstanding anything in this Act, the value of the supply deemed by subsection (1) to have been made by the vendor, shall be the full cost to such vendor of acquiring such enterprise, part, goods or services, as the case may be, reduced by an amount which bears to the
amount of such full cost the same ratio as the intended use or application of the enterprise, part, goods or services in the course of making taxable supplies bears to the total intended use or application of the enterprise, part, goods
or services: Provided that-
 
i)    the cost to such vendor of acquiring such enterprise, part, goods or services may be reduced by any amount which represents an appropriate allocation of such full cost to the acquisition of any goods or services which form part of such enterprise or part of an enterprise
and in respect of the acquisition of which by the vendor a deduction of input tax would be denied in terms of section 17(2); or
 
ii)   where such enterprise, part, goods or services were acquired-
 
aa) by means of a supply made by a vendor for no consideration or for a consideration in money which is less than the open market value of the supply; and
 
bb) in circumstances where the supplier and the recipient are connected persons,
 
the cost of such enterprise, part, goods or services shall be deemed to be the open market value of the supply of such enterprise, part, goods or services.
 
3)   Notwithstanding anything in this Act, the supply deemed by subsection (1) to have been made by the vendor shall

 
 
 
 

                        

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be deemed to be made in the tax period in which the supply of the enterprise or part of an enterprise is made.
 
4)   For the purposes of this section and sections 10(9), 18(4) and (5), the cost to the vendor of any goods or services acquired by a vendor in the circumstances contemplated in subsection (1) shall be deemed to be an amount equal to the aggregate of an amount which represents an appropriate allocation of the full cost to the vendor of the enterprise or part of an enterprise to those specific goods
or services and an amount determined by applying the rate of tax applicable at the time of supply contemplated in subsection (3) to the amount of such appropriate
allocation.
 
19. Goods or services acquired before incorporation
 
Any company, being a vendor, shall, where any amount of tax has been charged in terms of section 7 in relation to the acquisition of goods or services for or on behalf of that company or in connection with the incorporation of that company, and those goods or services were acquired prior to incorporation by a person who-
 
a)   was reimbursed by the company for the whole amount of the consideration paid for the goods or services; and
 
b)   acquired those goods or services for the purpose of an enterprise to be carried on by the company and has not used those goods or services for any purpose other than carrying on such enterprise,
 
be deemed to be the recipient of the goods or services and to have paid the tax so charged as if the supply or the payment of the tax had been made during the tax period in which the reimbursement referred to in paragraph (a) is made: Provided that this section shall not apply in relation to any goods or services where-
 
i)    the supply of those goods or services by that person to the

company is a taxable supply, or is a supply of second-hand goods not being a taxable supply;
 
ii)   those goods or services were so acquired more than six months prior to the date of incorporation of the company; or
 
iii)  the company does not hold sufficient records to establish the particulars relating to the deduction to be made.
 
20. Tax invoices
 
1)   Except as otherwise provided in this section, a supplier, being a registered vendor, making a taxable supply (other than a supply contemplated in section 8(10)) to a recipient, must within 21 days of the date of that supply issue a tax invoice containing such particulars as are specified in this section: Provided that-
 
i)    it shall not be lawful to issue more than one tax invoice for each taxable supply;
 
ii)   if a vendor claims to have lost the original tax invoice, the supplier or the recipient, as the case may be, may provide a copy clearly marked "copy".
 
1A) *[deleted by the Revenue Laws Amendment Act No. 32 of
2004].
 
2)   Where a recipient, being a registered vendor, creates a document containing the particulars specified in this section and purporting to be a tax invoice in respect of a taxable supply of goods or services made to the recipient by a supplier, being a registered vendor, that document shall be deemed to be a tax invoice provided by the supplier under subsection (1) of this section where-
 
a)   the Commissioner has granted prior approval for the issue of such documents by a recipient or recipients of a specified class in relation to the taxable supplies or

 
 
 
 

                        

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taxable supplies of a specified category to which the documents relate; and
 
b)   the supplier and the recipient agree that the supplier shall not issue a tax invoice in respect of any taxable supply to which this subsection applies; and
 
c)   such document is provided to the supplier and a copy thereof is retained by the recipient:
 
Provided that where a tax invoice is issued in accordance with this subsection, any tax invoice issued by the supplier in respect of that taxable supply shall be deemed not to be a tax invoice for the purposes of this Act.
 
3)   Where a supply of goods is deemed by section 8(10) to be made and both the recipient and the supplier in relation to that supply are registered vendors, the recipient shall, within 21 days after the day on which such supply is deemed by section 9(8) to be made, create and furnish to the supplier a document which contains the particulars specified in this section, and such document shall for the purposes of this Act be deemed to be a tax invoice provided by the supplier under subsection (1) of this section.
 
4)   Except as the Commissioner may otherwise allow, and subject to this section, a tax invoice (full tax invoice) shall be in the currency of the Republic and shall contain the following particulars:
 
a)   The words "tax invoice" in a prominent place;
 
b)   the name, address and VAT registration number of the supplier;
 
c)   the name, address and where the recipient is a registered vendor, the VAT registration number of the recipient;

d)   an individual serialized number and the date upon which the tax invoice is issued;
 
e)   full and proper description of the goods (indicating, where applicable, that the goods are second-hand goods) or services supplied;
 
f)    the quantity or volume of the goods or services supplied;
 
g)   either-
 
i)    the value of the supply, the amount of tax charged and the consideration for the supply; or
 
ii)   where the amount of tax charged is calculated by applying the tax fraction to the consideration, the consideration for the supply and either the amount of the tax charged, or a statement that it includes a charge in respect of the tax and the rate at which the tax was charged,
 
Provided that the requirement that the consideration or the value of the supply, as the case may be, shall be in the currency of the Republic shall not apply to a supply that is charged with tax under section 11.
 
5)   Notwithstanding anything in subsection (4), where the consideration in money for a supply does not exceed
R5 000, a tax invoice (abridged tax invoice) shall be in the currency of the Republic and shall contain the particulars specified in that subsection or the following particulars:
 
a)   The words "tax invoice" in a prominent place;
 
b)   the name, address and VAT registration number of the supplier;
 
c)   an individual serialized number and the date upon which the tax invoice is issued;

 
 
 
 

                        

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d)   a description of the goods (indicating, where applicable, that the goods are second-hand goods) or services supplied;
 
e)   either-
 
i)    the value of the supply, the amount of tax charged and the consideration for the supply; or
 
ii)   where the amount of tax charged is calculated by applying the tax fraction to the consideration, the consideration for the supply and either the amount of the tax charged, or a statement that it includes a charge in respect of the tax and the rate at which the tax was charged:
 
Provided that this subsection shall not apply to a supply that is charged with tax under section 11
 
5A) Notwithstanding anything to the contrary in subsections (4)
and (5), where a vendor acquires an enterprise from another vendor and as a result of that acquisition, the supplying vendor immediately ceases to be a vendor, and the purchasing vendor, within a period of six months from the date of the acquisition, issues or receives a tax invoice in respect of the acquired enterprise, that tax invoice may reflect the name, address and VAT registration number of the supplying vendor.
 
6)   Notwithstanding any other provision of this Act, a supplier shall not be required to provide a tax invoice if the total consideration for a supply is in money and does not exceed R50.
 
7)   Where the Commissioner is satisfied that there are or will
be sufficient records available to establish the particulars of any supply or category of supplies, and that it would be impractical to require that a full tax invoice be issued in terms of this section, the Commissioner may, subject to such conditions as the Commissioner may consider

necessary, direct-
 
a)   that any one or more of the particulars specified in subsection (4) or (5) shall not be contained in a tax invoice; or
 
b)   that a tax invoice is not required to be issued, or
 
c)   that the particulars specified in subsection (4) or (5) be furnished in any other manner.
 
8)   Notwithstanding anything in this section, where a supplier makes a supply (not being a taxable supply) of second- hand goods or of goods as contemplated in section 8(10)
to a recipient, being a registered vendor, the recipient shall, in the form as the Commissioner may prescribe, where the value of the supply is R1 000 or more, obtain and maintain
a declaration by the supplier stating whether the supply is a taxable supply or not and shall further maintain sufficient records to enable the following particulars to be ascertained:
 
a)
 
i)    The name of the supplier and-
 
aa) where the supplier is a natural person, his identity number; or
 
bb) where the supplier is not a natural person, the name and identity number of the natural person representing the supplier in respect of the supply and any legally allocated regstration number of the supplier:
 
Provided that the recipient-
 
A)  shall verify such name and identity number of any such natural person with reference to his identity document, as contemplated in section 1 of the Identification Act, 1997

 
 
 
 

                        

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(Act No. 68 of 1997), and, where the value of the supply is R1 000 or more, retain a photocopy of such name and identity number appearing in such identity document; or
 
B)  shall verify such name and registration number of any supplier other than a natural person with reference to its business letterhead or other similar document and, where the value of its supply is R1 000 or more, retain a photocopy of such name
and registration number appearing on such letterhead or document; and
 
ii)   the address of the supplier;
 
b)   the date upon which the second-hand goods were acquired or the goods were repossessed, as the case may be;
 
c)   a description of the goods;
 
d)   the quantity or volume of the goods;
 
e)   the consideration for the supply:
 
Provided that this subsection shall not require that recipient to keep such records where the total consideration for that supply is in money and does not exceed R50 or an amount determined by the Commissioner.
 
21. Credit and debit notes
 
1)   This section shall apply where, in relation to the supply of goods or services by any registered vendor-
 
a)   that supply has been cancelled; or
 
b)   the nature of that supply has been fundamentally varied or altered; or

c)   the previously agreed consideration for that supply has been altered by agreement with the recipient, whether due to the offer of a discount or for any other reason; or
 
d)   the goods or services or part of the goods or services supplied have been returned to the supplier, including the return to a vendor of a returnable container, the vendor in such case being deemed for the purposes of this Act to have made the supply of the container in respect of which the deposit was charged, whether the supply was made by him or any other person; or
 
e) an error has occurred in stipulating the amount of consideration agreed upon for that supply,
 
and the supplier has-
 
i)    provided a tax invoice in relation to that supply and the amount shown therein as tax charged on that supply is incorrect in relation to the amount
properly chargeable on that supply as a result of the occurrence of any one or more of the above- mentioned events; or
 
ii)   furnished a return in relation to the tax period in respect of which output tax on that supply is attributable, and has accounted for an incorrect amount of output tax on that supply in relation to the amount properly chargeable on that supply as a result of the occurrence of any one or more of the abovementioned events.
 
2)   Where a supplier has accounted for an incorrect amount of output tax as contemplated in subsection (1), that supplier shall make an adjustment in calculating the tax payable by the supplier in the return for the tax period during which it has become apparent that the output tax is incorrect, and
if-
 
a)   the output tax properly chargeable in relation to that

 
 
 
 

                        

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supply exceeds the output tax actually accounted for by the supplier, the amount of that excess shall be deemed to be tax charged by that supplier in relation to a taxable supply attributable to the tax period in which the adjustment is to be made, and shall not be attributable to any prior tax period; or
 
b)   the output tax actually accounted for exceeds the output tax properly charge able in relation to that supply, that supplier shall either make a deduction in terms of section 16(3) in respect of the amount of that excess (such amount being deemed for the purposes
of that section to be input tax), or reduce the amount of output tax attributable to the said tax period in terms of section 16(4) by the amount of that excess: Provided that the said deduction shall not be made where the excess tax has been borne by a recipient of goods or services supplied by the supplier and the recipient is
not a vendor, unless the amount of the excess tax has been repaid by the supplier to the recipient, whether in cash or by way of a credit against any amount owing to the supplier by the recipient.
 
3)   Subject to this section, where a tax invoice has been provided as contemplated in subsection (1)(i), and-
 
a)   the amount shown as tax charged in that tax invoice exceeds the actual tax charged in respect of the supply concerned, the supplier shall provide the recipient with a credit note, containing the following particulars:
 
i)    The words "credit note" in a prominent place;
 
ii)   the name, address and VAT registration number of the vendor;
 
iii)  the name, address and, where the recipient is a registered vendor, the VAT registration number of the recipient, except where the credit note relates

to a supply in respect of which a tax invoice contemplated in section 20(5) was issued;
 
iv)  the date on which the credit note was issued;
 
v)   either-
 
aa) the amount by which the value of the said supply shown on the tax invoice has been reduced and the amount of the excess tax; or
 
bb) where the tax charged in respect of the supply is calculated by applying the tax fraction to the consideration, the amount by which the consideration has been reduced and either the amount of the excess tax or a statement that the reduction includes an amount of tax and the rate of the tax included;
 
vi)  a brief explanation of the circumstances giving rise to the issuing of the credit note;
 
vii) information sufficient to identify the transaction to which the credit note refers;
 
b)   the actual tax charged in respect of the supply concerned exceeds the tax shown in the tax invoice as charged, the supplier shall provide the recipient with a debit note, containing the following particulars:
 
i)    The words "debit note" in a prominent place;
 
ii)   the name, address and VAT registration number of the vendor;
 
iii)  the name, address and, where the recipient is a registered vendor, the VAT registration number of the recipient, except where the debit note relates to a supply of goods in respect of which a tax invoice contemplated in section 20(5) was issued;

 
 
 
 

                        

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iv)  the date on which the debit note was issued;
 
v)   either-
 
aa) the amount by which the value of the said supply shown on the tax invoice has been increased and the amount of the additional tax; or
 
bb) where the tax charged in respect of the supply is calculated by applying the tax fraction to the consideration, the amount by which the consideration has been increased and either the amount of the additional tax or a statement
that the increase includes an amount of tax and the rate of the tax included;
 
vi)  a brief explanation of the circumstances giving rise to the issuing of the debit note;
 
vii) information sufficient to identify the transaction to which the debit nets refers:
 
Provided that-
 
A)  it shall not be lawful to issue more than one credit note or debit note for the amount of the excess;
 
B)  if any registered vendor claims to have lost the original credit note or debit note, the supplier or recipient, as the case may be, may provide a copy clearly marked "copy";
 
C)  a supplier shall not be required to provide a recipient with a credit note contemplated in paragraph (a) of this subsection in any case where and to the extent that the amount of the excess referred to in that paragraph arises as a result of the recipient taking up a prompt

payment discount offered by the supplier, if the terms of the prompt payment discount offer are clearly stated on the face of the tax invoice.
 
4)   Where a recipient, being a registered vendor, creates a document containing the particulars specified in this
section and purporting to be a credit note or a debit note in respect of a supply of goods or services made to the recipient by a supplier, being a registered vendor, the document shall be deemed to be a credit note or, as the case may be, a debit note provided by the supplier under subsection (3) where-
 
a)   the Commissioner has granted prior approval for the issue of such documents by a recipient or recipients of a specified class in relation to the supplies or supplies of a specified category to which the documents relate; and
 
b)   the supplier and the recipient agree that the supplier shall not issue a credit note or, as the case may be, a debit note in respect of any supply to which this subsection applies; and
 
c)   a copy of any such document is provided to the supplier and another copy is retained by the recipient:
 
Provided that-
 
i)    where a credit note is issued in accordance with this subsection, any credit note issued by the supplier in respect of that supply shall be deemed not to be a credit note for the purposes of this Act;
 
ii)   where a debit note is issued in accordance with this subsection, any debit note issued by the supplier in respect of that supply shall be deemed not to be a debit note for the purposes of this Act.
 
5)   Where the Commissioner is satisfied that there are or will

 
 
 
 

                        

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be sufficient records available to establish the particulars of any supply or category of supplies and that it would be impractical to require that a full credit note or debit note be issued in terms of this section, the Commissioner may, subject to any conditions that the Commissioner may consider necessary, direct-
 
a)               that any one or more of the particulars specified in paragraph (a) or, as the case may be, paragraph (b) of subsection (3) shall not be contained in a credit note or, as the case may be, a debit note; or
 
b)   that a credit note or, as the case may be, a debit note is not required to be issued.
 
6)   Where any recipient, being a registered vendor, has been issued with a credit note in terms of subsection (3)(a), or has written or other notice or otherwise knows that any tax invoice which the vendor holds is incorrect as a result of any one or more of the events specified in any of
paragraphs (a), (b), (c) or (d) of subsection (1) and has made a deduction of any amount of input tax in any tax period in respect of the supply of goods or services to which the credit note or that notice or other knowledge, as the case may be, relates, either the amount of the excess referred to in subsection (3)(a) shall be deemed to be tax charged in relation to a taxable supply made by the recipient attributable to the tax period in which the credit note was issued, or that notice or, as the case may be, other knowledge was received, or the amount of input tax deducted in terms of section 16(3) in the last-mentioned
tax period shall be reduced by the amount of the said excess, to the extent that the input tax deducted in the
first-mentioned tax period exceeds the output tax properly charged.
 
7)   Where any recipient, being a registered vendor, has been issued with a debit note in terms of subsection (3)(b) and

has made a deduction of any amount of input tax in any tax period in respect of the supply of goods or services to which that debit note relates, the recipient may, subject to the provisions of section 17, make a deduction of input tax in terms of section 16(3) in respect of the amount of the excess referred to in subsection (3)(b) in the tax period in which the debit note is issued, to the extent that the output tax properly charged exceeds the input tax deducted.
 
8)   Notwithstanding anything to the contrary in subsection (3), where a vendor acquires an enterprise from another vendor and as a result of that acquisition, the supplying vendor immediately ceases to be a vendor, and the purchasing vendor, within a period of six months from the date of acquisition, issues or receives a credit note or debit note,
as the case may be, in respect of the acquired enterprise, that credit note or debit note may reflect the name, address and VAT registration number of the supplying vendor.
 
22. Irrecoverable debts
 
1)   Where a vendor-
 
a)   has made a taxable supply for consideration in money;
and
 
b)   has furnished a return in respect of the tax period for which the output tax on the supply was payable and has properly accounted for the output tax on that supply as required under this Act; and
 
c)   has written off so much of the said consideration as has become irrecoverable,
 
the vendor may make a deduction in terms of section 16(3) of that portion of the amount of tax charged in relation to that supply as bears to the full amount of such tax the same ratio as the amount of consideration so written off as irrecoverable bears to the total consideration for the
supply, the deduction so made being deemed for the

 
 
 
 

                        

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purposes of the said section to be input tax: Provided that-
 
i)    where tax charged in respect of a supply of goods under an instalment credit agreement has become irrecoverable, any deduction in terms of section 16(3) as provided for in this section, shall be restricted to the tax content of the amount which has become irrecoverable in respect of the cash value of such supply, as applicable in respect of that agreement in terms of section 10(6);
 
ii)   the amount which has become irrecoverable in respect of such cash value shall be deemed to be an amount equal to the balance of the cash value remaining after deducting therefrom so much of the sum of the payments made by the debtor in terms of the said agreement as, on the basis of an apportionment in accordance with the rights and obligations of the parties to the said instalment credit agreement, may properly be regarded as having been made in respect of the cash value;
 
iii)  the said tax content shall be an amount calculated by applying the tax fraction, as applicable at the time the supply under the said instalment credit agreement was in terms of section 9(3)(c) deemed to have taken place, to the amount deemed as aforesaid to be irrecoverable in respect of such cash value;
 
iv)  a vendor who has transferred an account receivable at face value on a-
 
aa) non-recourse basis to any other person, shall not make any deduction in respect of such transfer in terms of this subsection; or
 
bb) recourse basis to any other person, may make a deduction in terms of this subsection only when such account receivable is transferred back to him

and he has written off so much of the consideration as has become irrecoverable:
 
Provided further that the deduction provided for in this subsection shall not be made in terms of section
16(3)-
 
i)    in respect of any amount which has become irrecoverable in respect of an instalment credit agreement if the vendor has repossessed the goods supplied in terms of that agreement; or
 
ii)   in the case of any vendor who is required to account for tax payable on a payments basis in terms of section 15, except in relation to any supply made by him to which section 9(2)(b) or section 9(3)(c) applies.
 
1A) Where a vendor-
 
a)   has made a taxable supply for consideration in money;
and
 
b)   has furnished a return in respect of the tax period for which the output tax on the supply was payable (at the rate of tax referred to in section 7(1)) and has properly accounted for the output tax on that supply as required in terms of this Act; and
 
c)   has transferred the account receivable relating to such taxable supply at face value to another vendor (hereinafter referred to as the recipient) on a non- recourse basis on or after the date of promulgation of the Taxation Laws Amendment Act, 1997,
 
and any amount of the face value (excluding any amount of finance charges or collection costs) of such account receivable has been written off as irrecoverable by such recipient, such recipient may make a deduction in terms of section 16(3) of an amount equal to the tax fraction (being

 
 
 
 

                        

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the tax fraction applicable at the time such taxable supply is deemed to have been made) of such face value (limited to the amount paid by the recipient in respect of such face value) written off by him, the deduction so made being deemed for the purposes of the said section to be input tax.
 
2)   Where any amount in respect of which a deduction has been made in accordance with subsection (1) is at any time wholly or partly recovered by the vendor, or becomes recoverable by him by virtue of the reassignment to him of the underlying debt, that portion of the amount of such deduction as bears to the full amount of such deduction
the same ratio as the amount of the irrecoverable debt recovered or reassigned bears to the debt written off shall be deemed to be tax charged in relation to a taxable supply made during the tax period in which the debt is wholly or partly recovered or assigned to such vendor.
 
3)   Where a vendor who is required to account for tax payable on an invoice basis in terms of section 15-
 
a)   has made a deduction of input tax in terms of section
16(3) in respect of a taxable supply of goods or services made to him; and
 
b)   has, within a period of 12 months after the expiry of the tax period within which such deduction was made, not paid the full consideration in respect of such supply,
 
an amount equal to the tax fraction, as applicable at the time of such deduction, of that portion of the consideration which has not been paid shall be deemed to be tax
charged in respect of a taxable supply made in the tax period following the expiry of the period of 12 months: Provided that-
 
i)    the period of 12 months shall, if any contract in writing in terms of which such supply was made provides for

the payment of consideration or any portion thereof to take place after the expiry of the tax period within which such deduction was made, in respect of such consideration or portion be calculated as from the end of the month within which such consideration or portion was payable in terms of that contract;
 
ii)   where-
 
aa) the estate of a vendor is sequestrated, whether voluntarily or compulsorily;
 
bb) the vendor is declared insolvent;
 
cc) the vendor has entered into a compromise or an arrangement in terms of section 311 of the Companies Act, 1973 (Act No. 61 of 1973), or a similar arrangement with creditors, or
 
dd) the vendor ceases to be a vendor as contemplated in section 8(2),
 
within 12 months after the expiry of the tax period within which that deduction was made, not paid the full consideration, the vendor must account for output tax in terms of this section equal to that portion of the consideration which has not been paid-
 
AA) at the time of sequestration, declaration of insolvency or the date on which the compromise or the arrangement or similar arrangement was entered into; or
 
BB) immediately before the vendor ceased to be a vendor as contemplated in section 8(2); or
 
iii)  subparagraph (ii) shall not be applicable where a vendor has already accounted for tax payable in accordance with this subsection.
 
4)   If a vendor who has accounted for tax payable in

 
 
 
 

                        

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accordance with subsection (3) at any time thereafter pays any portion of the consideration in respect of the supply in question, he may in terms of section 16(3) make a deduction of input tax of an amount equal to the tax fraction, as applicable at the time of the deduction contemplated in paragraph (a) of the said subsection (3), of that portion of the consideration so paid.
 
5)   [deleted by the Revenue Laws Amendment Act, 2003]

lll. Registration
 
23. Registration of persons making supplies in the course of enterprises
 
1)   Every person who, on or after the commencement date, carries on any enterprise and is not registered, becomes liable to be registered-
 
a)   at the end of any month where the total value of taxable supplies made by that person in the period of
12 months ending at the end of that month in the course of carrying on all enterprises has exceeded R1 million;
 
b)   at the commencement of any month where there are reasonable grounds for believing that the total value of the taxable supplies to be made by that person in the period of 12 months reckoned from the commencement of the said month will exceed the above-mentioned amount:
 
Provided that the total value of the taxable supplies of the vendor within the period of 12 months referred to in paragraph (a) or the period of 12 months referred to in paragraph (b) shall not be deemed to have exceeded or be likely to exceed the amount contemplated in paragraph (a), where the Commissioner is satisfied that the said total value will exceed or is likely to exceed such amount solely as a consequence of-
 
i)    any cessation of, or any substantial and permanent reduction in the size or scale of, any enterprise carried on by that person; or
 
ii)   the replacement of any plant or other capital asset used in any enterprise carried on by that person; or
 
iii)  abnormal circumstances of a temporary nature.

 
 
 
 

                        

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2)   Every person who, in terms of subsection (1) or section
50A, becomes liable to be registered shall not later than 21 days after becoming so liable apply to the Commissioner for registration in such form as the Commissioner may direct and provide the Commissioner with such further particulars and any documentation as the Commissioner may require in such form for the purpose of registering that person: Provided that where-
 
i)    a person who applies for registration under this subsection has not provided all particulars and documentation as required by the Commissioner, that person shall be deemed not to have applied for registration unti he has provided all such particulars and documentation to the Commissioner;
 
ii)   such person is not a resident of the Republic, such person shall be deemed not to have applied for registration until he has-
 
aa) appointed a representative vendor as contemplated in section 48(1) in the Republic and furnished the Commissioner with the particulars of such representative vendor;
 
bb) opened a banking account with any bank, mutual bank or other similar institution, registered in terms of the Banks Act, 1990 (Act No. 94 of 1990), for the purposes of his enterprise carried on in the Republic and furnished the Commissioner with the particulars of such banking account.
 
3)   Notwithstanding the provisions of subsections (1) and (2), every person who satisfies the Commissioner that, on or after the commencement date-
 
a)   that person is a 'municipality'  as defined in section 1 or is carrying on any enterprise as contemplated in paragraph (b)(ii), (iii) or (v) of the definition of 'enterprise'

in section 1; or
b)   that person is carrying on any enterprise other than- i)     as contemplated in paragraph (b)(ii) or (iii) of the
definition of 'enterprise' in section 1; or
 
ii)   as a 'municipality'  as defined in section 1 and the total value of taxable supplies made by that person in the course of carrying on all enterprises in the preceding period of 12 months has exceeded R50
000; or
 
c)   that person intends to carry on any enterprise from a specified date, where that enterprise will be supplied to him as a going concern and the total value of taxable supplies made by the supplier of the going concern from carrying on that enterprise or part of the
enterprise which will be supplied has exceeded R50
000 in the preceding 12 months; or
 
d)   that person is continuously and regularly carrying on an activity which, in consequence of the nature of that activity, can reasonably be expected to result in taxable supplies being made for a consideration only after a period of time and where the total value of taxable supplies to be made can reasonably be expected to exceed R50 000 in a period of 12 months,may apply to the Commissioner for registration in such form as the Commissioner may direct and provide the Commissioner with such further particulars and any documentation as the Commissioner may require in such form for the purpose of registering that person.
 
3A) For the purposes of subsections (2) and (3), the Commissioner may require a person to submit biometrical information, in such manner and form as may be prescribed by the Commissioner, to ensure-
 
a)   the proper identification of the person; or

 
 
 
 

                        

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b)   the counteracting of identity theft or fraud
 
4)   Where any person has-
 
a)   applied for registration in accordance with subsection (2) or (3) and the Commissioner is satisfied that that person is eligible to be registered in terms of this Act, that person shall be a vendor for the purposes of this Act with effect from such date as the Commissioner may determine; or
 
b)   not applied for registration in terms of subsection (2) and the Commissioner is satisfied that that person is liable to be registered in terms of this Act, that person shall be a vendor for the purposes of this Act with effect from the date on which that person first became liable to be registered in terms of this Act: Provided that the Commissioner may, having regard to the
circumstances of the case, determine that person to be a vendor from such later date as the Commissioner
may consider equitable;
 
Provided that where that person is a public entity listed in Schedule 1 or Part A or C of Schedule 3 to the Public Finance Management Act, 1999 (Act No. 1 of 1999), which was liable to be registered as a vendor for any supplies made on or before 31 March 2005, but did not register before 1 April 2005, the Commissioner must not register that person in respect of those supplies.
 
5)   Notwithstanding anything in this Act to the contrary, where any enterprise is carried on by any association not for gain in branches or divisions, or separate enterprises are carried on by that association, that association may apply in
writing to the Commissioner for any such branch, division or separate enterprise to be deemed to be a separate person for the purposes of this section, and if every such branch, division or separate enterprise maintains an independent system of accounting and can be separately

identified by reference to the nature of the activities carried on or the location of that branch, division or separate enterprise, every such branch, division or separate enterprise shall be deemed to be a separate person, and not a part of the association, and, where any such branch, division or separate enterprise is deemed to be a separate person under this subsection, any enterprise carried on by that branch or division or any separate enterprise carried on by the association shall, to that extent, be deemed not to be carried on by the association concerned.
 
6)   The provisions of this Act relating to the determination of the value of any supply of goods or services, whether such supply is made before or on or after the commencement date, shall apply for the purposes of this section, but no regard shall be had to any tax charged in respect of any such supply: Provided that any supply of services contemplated in section 11(2)(n) shall for the purposes of this section be deemed not to be a taxable supply.
 
7)   Where the Commissioner is satisfied that any person who has applied for registration in terms of subsection (3) is not eligible to be registered in terms of this Act or should not be registered by reason of the fact that such person-
 
a)   has no fixed place of abode or business; or
 
b)   does not keep proper accounting records relating to any enterprise carried on by him; or
 
c)   has not opened a banking account with any bank, mutual bank or other similar institution for the purposes of any enterprise carried on by him; or
 
d)   has previously been registered as a vendor in respect of any enterprise, whether in terms of this Act or in terms of the Sales Tax Act, 1978 (Act No. 103 of 1978), but failed to perform his duties under either of the said Acts in relation to such enterprise,

 
 
 
 

                        

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the Commissioner may refuse to register the said person as a vendor in terms of this Act and shall give written notice to that person of such refusal.
 
8)   Notwithstanding subsections (1) and (2), where any person is registered as a micro business in terms of the Sixth Schedule to the Income Tax Act, that registered micro business may not register as a vendor.
 
9)   Where any registered micro business is deregistered in terms of paragraph 1O of the Sixth Schedule to the Income Tax Act, other than by reason of its disqualification in terms of paragraph 3(a) to 3(g)(ii) of that Schedule, the person shall be a vendor from the date the deregistration takes effect.
 
24. Cancellation of registration
 
1)   Subject to the provisions of subsection (2), every vendor shall cease to be liable to be registered where the Commissioner is satisfied that the total value of the vendor's taxable suppliers in the period of 12 months commencing at the beginning of any tax period of the vendor will be not more than the amount referred to in section 23(1).
 
2)   Every vendor who wishes to have his registration cancelled in the circumstances contemplated in subsection (1), may request the Commissioner in writing to cancel his registration, and if the Commissioner is satisfied as contemplated in subsection (1), the Commissioner shall cancel the vendor's registration with effect from the last
day of the tax period during which the Commissioner was so satisfied, or from such other date as may be determined by the Commissioner, and shall notify the vendor of the date on which the cancellation of the registration takes effect.
 
3)   Every vendor who ceases to carry on all enterprises shall

notify the Commissioner of that fact within 21 days of the date of such cessation and the Commissioner shall cancel the registration of such vendor with effect from the last day of the tax period during which all such enterprises ceased, or from such other date as may be determined by the Commissioner.
 
4)   Any notification by a vendor in terms of subsection (3) shall be made in writing to the Commissioner and shall state the date upon which that vendor ceased to carry on all enterprises and whether or not that vendor intends to carry on any enterprise within 12 months from that date.
 
5)   Where the Commissioner is satisfied that a vendor no longer complies with the requirements for registration as contemplated in section 23(3) the Commissioner may cancel such vendor's registration with effect from the last day of the tax period during which the Commissioner is so satisfied, or from such other date as may be determined by the Commissioner.
 
6)   Where any person has been registered as a vendor in consequence of an application made by him under section
23(3) and subsequent to the registration of that person as a vendor it appears to the Commissioner that such person's registration should be cancelled by reason of any of the circumstances referred to in section 23(7), the Commissioner may cancel such person's registration with effect from a date determined by the Commissioner: Provided that where such person lodges an objection against the Commissioner's decision under this subsection the cancellation of that person's registration shall not take effect until such time as the Commissioner's decision becomes final and conclusive.
 
7)   The Commissioner shall give written notice to the person concerned of his decision to cancel such person's registration in terms of this section or of his refusal to

 
 
 
 

                        

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cancel such registration.
 
25. Vendor to notify change of status
 
Subject to this Act, every vendor shall within 21 days and in such form as the Commissioner may prescribe notify the Commissioner in writing of-
 
a)   any change in the name, address, constitution or nature of the principal enterprise or enterprises of that vendor;
 
b)   any change of address at or from which, or the name in which, any enterprise is carried on by that vendor;
 
c)   any change whereby that vendor ceases to satisfy the conditions provided in section 15(2), where the Commissioner has given a direction in respect of that vendor in terms of that section;
 
d)   any change whereby the provisions of section 27(3)(a)
become applicable in the case of that vendor;
 
dA) any change whereby the provisions of section 27(4B)(a)
cease to apply in respect of that vendor;
 
e)   any change in the composition of the members of a partnership or joint venture;
 
f)    the appointment or resignation of a representative vendor as contemplated in section 48(1);
 
g)   any change whereby the provisions of section 27(4)(c) are no longer applicable in the case of that vendor:
 
Provided that this section shall not apply to the notification of any changes in the ownership of any company.
 
26. Liabilities not affected by person ceasing to be vendor
 
The obligations and liabilities under this Act of any person in respect of anything done, or omitted to be done, by that person while that person is a vendor shall not be affected by

the fact that that person ceases to be a vendor, or by the fact that, being registered as a vendor, the Commissioner cancels that person's registration as a vendor.

 
 
 
 

                        

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IV. Returns, Payments and Assessments
 
27. Tax period
 
1)   For the purposes of this section-
 
"Category A" means the category of vendors whose tax periods are periods of two months ending on the last day
of the months of January, March, May, July, September and
November of the calendar year,
 
"Category B" means the category of vendors whose tax periods are periods of two months ending on the last day of the months of February, April, June, August, October and December of the calendar year,
 
"Category C" means the category of vendors whose: tax periods are periods of one month ending on the last day of each of the 12 months of the calendar year,
 
"Category D" means the category of vendors whose tax periods are periods of six months ending on the last day of February and August of the calendar year or, where any vendor falling within this category makes written
application therefor, on the last day of such other months as the Commissioner may approve.
 
"Category E" means the category of vendors whose tax periods are periods of twelve months ending on the last day of their 'year of assessment' as defined in section 1 of the Income Tax Act or where any vendor falling within this
category makes written application therefor, on the last day of such other month as the Commissisoner may approve.
 
"Category F" means the category of vendors whose tax periods are periods of four months ending on the last day of June, October and February of the calendar year.

 
 
 
 

                        

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2)
 
a)   Every vendor, not being a vendor who fails within Category C, D, E or F as contemplated in subsection (3), (4), (4A) or (4B), shall fall within Category A or Category B.
 
b)   The Commissioner shall determine whether such vendor falls within Category A or Category B and notify the vendor accordingly.
 
c)   The determinations made by the Commissioner under paragraph (b) shall be made so as to ensure that approximately equal numbers of vendors fall within category A and Category B.
 
d)   The Commissioner may from time to time direct that any vendor falling within Category A shall, with effect from the commencement of a future period, fall within Category B, or vice versa.
 
3)   A vendor shall fall within Category C if-
 
a)   the total value of the taxable supplies of the vendor (including the taxable supplies of any branches, divisions or separate enterprises of the vendor registered as separate vendors under section 50(2))-
 
i)    has in the period of 12 months ending on the last day of any month of the calendar year exceeded R30 million; or
 
ii)   is likely to exceed that amount in the period of 12 months beginning on the first day of any such month; or
 
b)   the vendor has applied in writing for the tax periods in his case to be on a monthly basis; or
 
c)   the vendor has repeatedly made default in performing any of his obligations in terms of this Act,

and the Commissioner has directed that, with effect from the commencement date or such later date as may be appropriate, the vendor shall fall within Category C: Provided that a vendor falling within Category C shall cease to fall within that Category with effect from the commencement of a future period notified by the Commissioner, if the vendor has applied in writing to be placed within Category A, B, D, E or F and the Commissioner is satisfied that by reason of a change in the vendor's circumstances he satisfies the requirements of
this section for placing within Category A, B, D, E or F.
 
4)   A vendor shall fall within Category D if-
 
a)   the vendor's enterprise consists solely of agricultural, pastoral or other farming activities or the vendor is a branch, division or separate enterprise which is deemed by subsection (5) of section 23 to be a separate person for the purposes of that section and is
as such registered under that section or the vendor is a branch, division or separate enterprise registered as a separate vendor under section 50(2);
 
b)   the activities of any such branch, division or separate enterprise consist solely of agricultural, pastoral or other farming activities and activities of that kind are not carried on in any other branch, division or separate enterprise of the vendor or the association not for gain, as the case may be, by whom a written application referred to in paragraph (e) is made;
 
c)   the total value of the taxable supplies of the vendor from agricultural, pastoral or other farming activities-
 
i)    has in the period of 12 months ending on the last day of any month of the calendar year not exceeded R1,2 million; and
 
ii)   is not likely to exceed that amount in the period of

 
 
 
 

                        

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12 months commencing at the end of the period referred to in subparagraph (i);
d)   the vendor does not fall within Category C; and e)   the vendor whose enterprise consists solely of
agricultural, pastoral or other farming activities or the
vendor referred to in section 50(2) or the association not for gain referred to in section 23(5), as the case may be, has made a written application to the Commissioner, in such form as the Commissioner may prescribe, for such first-mentioned vendor or the branch, division or separate enterprise in question, as the case may be, to be placed within Category D,
 
and the Commissioner has directed that, with effect from the commencement date or such later date as may be appropriate, the vendor shall fall within Category A: Provided that a vendor falling within Category D shall cease to fall within that Category with effect from the commencement of a future period notified by the Commissioner, if written application is made by the person who made the application referred to in paragraph (e) for
the vendor to be placed within Category A, B, C, E or F or the Commissioner is satisfied that by reason of a change in circumstances that vendor should be placed within Category A, B, C, E or F.
 
4A) A vendor shall fall within Category E if-
 
a)   the vendor is a company or a trust fund;
 
b)   the vendor's enterprise consists solely of one or more of the activities of-
 
i)    letting of fixed proerty or the renting of movable goods to; or
 
ii)   the administration or management of,

companies which are connected persons in relation to the vendor;
 
c)   the recipients of those supplies are all registered vendors and are entitled to deductions of the full amount of tax in respect of those supplies;
 
d)   tax invoices are issued once a year and payments of consideration for these supplies, by agreement between the parties, only become due once a year at the end of the 'year of assessment' as defined in section 1 of the Income Tax Act of the vendor making the supplies; and
 
e)   the vendor has made written application to the Commissioner in such form as the Commissioner may prescribe, to be placed in Category E,
 
and the Commissioner has directed that, with effect from a date which he considers appropriate, the vendor shall fall within Category E: Provided that a vendor falling within Category E shall cease to fall within that Category with effect from a date notified by the Commissioner if-
 
i)    written application is made by the person who
made the application referred to in paragraph (e) for the vendor to be placed in a different Category; or
 
ii)   the Commissioner is satisfied that by reason of a change in circumstances, that vendor should be placed in Category A, B, C, D or F; or
 
iii)  the vendor's placing in Category E results in any financial loss (including any loss of interest) to the State.
 
4B) A vendor (other than a vendor registered under section 50), shall fall within Category F if-
 
a)   the total value of the taxable supplies of the vendor-

 
 
 
 

                        

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i)    has in the period of 12 months ending on the last day of any month not exceeded R1,2 million; and
 
ii)   is not likely to exceed that amount in the period of
12 months commencing at the end of the period referred to in subparagraph (i); and
 
b)   the vendor has made written application to the Commissioner in such form as the Commissioner may prescribe, to be placed in Category F:
 
Provided that a vendor falling within Category F shall cease to fall within that Category with effect from a date notified by the Commissioner if-
 
i)    written application is made by the vendor to be placed in a different Category;
 
ii)   the Commissioner is satisfied that by reason of a change in circumstances that vendor should be placed within Category A, B, C, D or E; or
 
iii)  the vendor has repeatedly made default in performing any of his obligations in terms of this Act.
5)   For the purposes of subsection (3)(a) and subsection (4)(c)- a)   the provisions of this Act relating to the determination
of the value of any supply of goods or services,
whether such supply is made before or on or after the commencement date, shall apply for the purposes of this paragraph, but no regard shall be had to any tax charged in respect of such supply, and
 
b)   the total value of the taxable supplies of a vendor within any period of 12 months referred to in subsection (3)(a) or (4)(c) shall not be deemed to have exceeded or be likely to exceed the amount referred to in subsection (3)(a) or the amount referred to in subsection (4)(c), as the case may be, where that total

value exceeds or is likely to exceed that amount, as the case may be, solely as a consequence of-
 
i)    any cessation of, or any substantial or permanent reduction in the size or scale of, any enterprise carried on by the vendor, or
 
ii)   the replacement of any plant or other capital asset used in any enterprise carried on by the vendor, or
 
iii)  abnormal circumstances of a temporary nature.
 
6)   The tax periods applicable under this Act to any vendor shall be the tax periods applicable to the Category within which the vendor falls as contemplated in this section: Provided that-
 
i)    the first such period shall commence on the commencement date or, where any person becomes a vendor on a later date, such later date;
 
ii)   any tax period ending on the last day of a month, as applicable in respect of the relevant Category, may, instead of ending on such last day, end on a fixed day approved by the Commissioner, which day shall fall within 1O days before or after such last day;
 
iii)  the first day of any tax period of the vendor subsequent to the vendor's first tax period shall be the first day following the last day of the vendor's preceding tax period.
 
28. Returns and payments of tax
 
1)   Every vendor shall, within the period ending on the twenty- fifth day of the first month commencing after the end of a tax period relating to such vendor or, where such tax period ends on or after the first day and before the twenty-fifth
day of a month, within the period ending on such twenty- fifth day-

 
 
 
 

                        

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a)   furnish the Commissioner with a return reflecting such information as may be required for the purpose of the calculation of tax in terms of section 16; and
 
b)   calculate the amounts of such tax in accordance with the said section and pay the tax payable to the Commissioner or calculate the amount of any refund due to the vendor:
 
Provided that- i)
ii)   where payment of the full amount of the tax is effected by means of a debit order and the requirements for the transfer of the tax have been met by the vendor, such debit order shall not be effected prior to the last business day of the month during which the said twenty-fifth day falls and the period within which the tax is required to be paid shall be deemed to end on the last business day of such month.
 
iii)  a vendor registered with the Commissioner to submit returns and payment electronically,(other than by means of a debit order), must furnish the return and make full payment of the amount of tax within the period ending on the last business day of the month during which that twenty-fifth day falls.
 
iv)
 
v)
 
2)   Every vendor who is registered in terms of the provisions of Part III shall within the period allowed by subsection (1) of this section furnish the return referred to in that subsection in respect of each tax period relating to such vendor, whether or not tax is payable or a refund is due in respect
of such period.

3)
 
4)
 
a)
 
b)
 
5)
 
a) b) c)
6)
 
7)
 
8)
 
9)
 
a)
 
b)   Notwithstanding anything to the contrary contained in any other law, nothing in the application of the rules of evidence shall be applied so as to deny the admissibility of any electronic communication under this section for purposes of this Act in evidence -
 
i)    on the sole grounds that it is an electronic data message; or
 
ii)   if it is the best evidence that the person adducing it could reasonably be expected to obtain, on the grounds that it is not in original form.
 
c)
 
i)    Information in the form of a data message shall be given due evidential weight.

 
 
 
 

                        

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ii)   In assessing the evidential weight of a data message a court shall have regard to -
 
(AA)                  the reliability of the manner in which the data message was generated, stored and communicated;
 
(BB)     the reliability of the manner in which the integrity of the information was maintained;
 
(CC)    the manner in which its originator was identified;
 
(DD)    whether these functions were in compliance with the agreement contemplated in paragraph (a); and
 
(EE)the requirements of this section, and any other relevant factor
 
29. Special returns
 
Where goods are deemed by section 8(1) to be supplied in the course of an enterprise the person selling the goods
(hereinafter referred to as the seller), whether or not the seller is a vendor, shall, within the period of 30 days after the date on which the sale was made-
 
a)   furnish the Commissioner with a return (in such form as the Commissioner may prescribe) reflecting-
 
i)    the name and address of the seller and, if registered as a vendor, his or her VAT registration number,
 
ii)   the name and address of the person whose goods are sold (hereinafter referred to as the owner) and, if the owner is registered under this Act, the VAT registration number of the owner,
 
iii)  the date of the sale;

iv)  the description and quantity of the goods sold;
 
v)   the selling price of the goods and the amount of tax charged in respect of the supply of goods under the sale, being the tax leviable in respect of such supply under section 7(1)(a); and
 
vi)  such other particulars as may be required;
 
b)   pay to the Commissioner the amount of tax so charged; and
 
c)   send or deliver to the owner a copy of the return referred to in paragraph (a),
 
and the seller and the owner shall exclude from any return
which the seller or owner is required to furnish under section 28 the tax charged on the supply of goods under the sale in respect of which the return is furnished under this section.
 
30. Other returns
 
to any return required under any other provision of this Act, the Commissioner may require any person, whether or not that person is a vendor, to furnish on his own behalf or as an agent or trustee, to the Commissioner such further or other return, in a form prescribed by the Commissioner, as and when required by the Commissioner for the purposes of this Act.
 
31. Assessments
 
1)   Where-
 
a)   any Person fails to furnish any return as required by section 28, 29 or 30 or fails to furnish any declaration as required by section 14; or
 
b)   the Commissioner is not satisfied with any return or declaration which any person is required to furnish under a section referred to in paragraph (a); or
 
c)   the Commissioner has reason to believe that any

 
 
 
 

                        

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person has become liable for the payment of any amount of tax but has not paid such amount; or
 
d)   any person, not being a vendor, supplies goods or services and represents that tax is charged on that supply; or
 
e)   any vendor supplies goods or services and such supply is not a taxable supply or such supply is a taxable supply in respect of which tax is chargeable at a rate of zero per cent, and in either case that vendor represents that tax is charged on such supply at a rate in excess
of zero per cent,
 
f)    any person who holds himself out as a person entitled to a refund or who produces, furnishes, authorises, or makes use of any tax invoice or document or debit note and has obtained any undue tax benefit or refund under the provisions of the regulation referred to in the definition of 'exported' in section 1, to which such person is not entitled,
 
the Commissioner may, notwithstanding the provisions of section 32(5) of this Act and section 83(18) and 83A(12)
of the Income Tax Act, make an assessment of the amount of tax payable by the person liable for the payment of such amount of tax, and the amount of tax so assessed shall be paid by the person concerned to the Commissioner.
 
2)   For the purposes of subsection (1), the person liable for the payment of any amount of tax assessable by the Commissioner shall be-
 
a)   the person liable for the payment of such tax in terms of the provisions of section 7; or
 
b)   where the provisions of section 29 are applicable- i)      the seller referred to in that section, unless the

provisions of subparagraph (ii) are applicable; or
 
ii)   the owner referred to in that section, if the said seller holds a written statement contemplated in section 8(1)(b) furnished by the said owner and that written statement is incorrect; or
 
c)   where subsection (1)(d) is applicable, the person referred to in that provision;
 
d)   where subsection(1)(e) is applicable, the vendor referred to in that provision.
 
3)   In making such assessment the Commissioner may estimate the amount upon which the tax is payable.
 
4)   The Commissioner shall give the person concerned a written notice of such assessment, stating the amount upon which tax is payable, the amount of tax payable, the
amount of any additional tax payable in terms of section 60 and the tax period (if any) in relation to which the assessment is made, and-
 
a)   where the assessment is made on a seller referred to in subsection 2(b)(i), send a copy of that notice of assessment to the owner referred to in that subsection; or
 
b)   where the assessment is made on an owner referred to in subsection (2)(b)(ii), send a copy of that notice of assessment to the seller referred to in that subsection.
 
5)   The Commissioner shall, in the notice of assessment referred to in subsection (4), give notice to the person upon whom it has been made that any objection to such assessment shall be lodged or be sent so as to reach the Commissioner within 30 days after the date of such notice.
 
5A) If it appears to the Commissioner that any person is for any reason unable to furnish an accurate return as

 
 
 
 

                        

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contemplated in section 28, 29 or 30, the Commissioner may agree in writing with such person as to the amount upon which tax shall be payable, and to the extent that an assessment is issued upon an amount so agreed to, such assessment shall not be subject to objection.
 
6)   For the purposes of this section, Part II, Part VI and sections 58, 59, 60 and 61-
 
a)   the person referred to in subsection (1)(d) shall be deemed to be a vendor, and
 
b)   any tax represented to be charged on any supply referred to in subsection (1)(d) or (1)(e) shall be deemed to be tax payable by the vendor concerned and the amount thereof as assessed under this section shall be paid within the period allowed by the Commissioner.
 
31A. Reduced Assessments
 
1)   The Commissioner may, notwithstanding the fact that no objection has been lodged or appeal noted in terms of the provisions of Part V of this Act, reduce an assessment-
 
a)   to rectify any processing error made in issuing that assessment; or
 
b)   where it is proved to the satisfaction of the Commissioner that in issuing that assessment any amount which-
 
i)    was taken into account by the Commissioner in determining the liability for tax, should not have been taken into account; or
 
ii)   should have been taken into account in determining the liability for tax, was not taken into account by the Commissioner:
 
Provided that such assessment, wherein the amount was so taken into account or not taken into account, as

contemplated in subparagraph (i) or (ii), as the case may be, was issued by the Commissioner based on information provided in the vendor's return for the current or any previous tax period.
 
2)   The Commissioner shall not reduce an assessment under subsection (1)-
 
a)   after the expiration of three years from the date of that assessment; or
 
b)   if the amount was assessed in terms of an assessment accepted by the taxpayer and which was made in accordance with the practice generally prevailing at the date of that assessment.
 
31B. Withdrawal of assessments
 
1)   The Commissioner may, notwithstanding the fact that no objection has been lodged or appeal has been noted in terms of Part V, withdraw an assessment, which-
 
a)   was issued to the incorrect person; or
 
b)   was issued in respect of the incorrect tax period.
 
2)   Any assessment withdrawn by the Commissioner in terms of this section shall for all purposes of this Act be deemed not to have been issued.

 
 
 
 

                        

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V. Objections and Appeals
 
32. Objections to certain decisions or assessments
 
1)   Any person who is dissatisfied with-
 
a)   any decision given in writing by the Commissioner-
 
i)    in terms of section 23(7) notifying that person of the Commissioner's refusal to register that person in terms of this Act; or
 
ii)   in terms of section 24(6) or (7) notifying that person of the Commissioner's decision to cancel any registration of that person in terms of this Act or of the Commissioner's refusal to cancel such registration; or
 
iii)  in terms of section 44(8) of the Commissioner's refusal to make a refund; or
 
iv)  refusing to approve a method for determining the ratio contemplated in section 17(1); or
 
v)   in terms of section 43(5) and (6) notifying a
member, shareholder or trustee of a vendor that he is required to provide surety in respect of the vendor's liability for tax from time to time; or
 
vi)  refusing to remit, in whole or in part, any interest or penalty in terms of section 39(7); or
 
b)   any assessment made upon him under the provisions of section 31, 60 or 61, may lodge an objection thereto with the Commissioner; or
 
c)   any direction or supplementary direction made by the Commissioner and served on that person in terms of section 50A(3) or (4),
 
may lodge an objection thereto with the Commissioner.

 
 
 
 

                        

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2)   The provisions of sections 107A and Part IIIA of Chapter III of the Income Tax Act, 1962 (Act No. 58 of 1962), and any rules under that Act relating to any objection or to the settlements of disputes shall mutatis mutandis apply with reference to any objection under this section.
 
2A) The period prescribed in the rules issued in terms of
section 107A of the Income Tax Act within which objections must be made may be extended by the Commissioner where the Commissioner is satisfied that reasonable grounds exist for the delay in lodging the objection.
 
3)   A decision by the Commissioner in the exercise of his or her discretion under subsection (2A) is subject to objection and appeal.
 
4)   The Commissioner may on receipt of a notice of objection to a decision, direction, supplementary direction or an assessment, alter the decision, direction, supplementary direction or assessment or may disallow the objection and must send the person notice of such alteration or disallowance, and record any alteration or disallowance made in the decision, direction, supplementary direction or assessment.
 
5)   Where no objection is lodged against any decision, direction, supplementary direction or assessment by the Commissioner as contemplated in subsection (1), or where any objection has been allowed in full or withdrawn, such decision, direction, supplementary direction, assessment or altered decision, direction, supplementary direction or assessment, as the case may be, is final and conclusive.
 
33. Appeal to tax court
 
1)   Subject to the provisions of section 33A, an appeal against any decision, direction, supplementary direction or assessment of the Commissioner, as notified in terms of section 32(4), shall lie to the tax court constituted under the

provisions of section 83 of the Income Tax Act within the period prescribed and the rules issued in terms of section
107A of the Income Tax Act for the area in which the appellant resides or carries on business or, if the appellant and the Commissioner agree, for any other area.
 
1A) The period prescribed in the rules promulgated in terms of section 107A of the Income Tax Act within which appeal must be noted may be extended by the Commissioner where the Commissioner is satisfied that reasonable grounds exist for the delay in noting the appeal: Provided that any decision by the Commissioner in the exercise of his or her discretion under this is subject to objection and appeal.
 
1B) A notice of appeal is of no force or effect whatsoever which is not delivered at the Commissioner's office or posted in sufficient time to reach the Commissioner within the period prescribed for noting appeal or within such extended
period as contemplated in subsection (1A).
 
2)   [deleted by Second Revenue Laws Amendment Act, No. 60 of 2001]
 
3)   At the hearing by the tax court of any appeal to that court the tax court may inquire into and consider the matter before it and may confirm, cancel or vary any decision, direction or supplementary direction of the Commissioner under appeal or make any other decision, direction or supplementary direction which the Commissioner was empowered to make at the time the Commissioner made the decision, direction or supplementary direction under appeal or, in the case of any assessment order that assessment to be altered or confirm the assessment or, if it thinks fit, refer such matter back to the Commissioner for further investigation and reconsideration in the light of principles laid down by the court;
 
4)   The provisions of sections 83(8), (11), (12), (14), (17), (18)

 
 
 
 

                        

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(19), 84, 85 and 107A and Part lllA of Chapter lll of the lncome Tax Act and any rules under that Act relating to any appeal to the tax court or to the settlement of disputes
shall mutatis mutandis apply with reference to any appeal under this section which is or is to be heard by that court or to any settlement of a dispute in terms of this Act.
 
33A. Appeals to specially constituted board
 
1)   Any appeal referred to in section 33(1) of this Act shall in the first instance be heard by the Board established by section 83A(2) of the lncome Tax Act, where-
 
a)   the appeal is lodged against an assessment of the Commissioner, and the amount of the tax in dispute does not exceed such amount which the Minister may from time to time fix by notice in the Gazette; or
 
b)   the appeal is lodged against the Commissioner's disallowance of an objection against a decision, direction or supplementary direction of the Commissioner referred to in section 32(1)(a) , (b) or (c) of this Act; or
 
c)   the Commissioner and the appellant agree to the hearing of the appeal by the Board; or
 
d)   no objection to the jurisdiction of the Board to hear the appeal is made at or before the commencement of the hearing of the appeal:
 
Provided that where the Commissioner at any time prior to the hearing of such appeal, or the Chairperson of the Board at any time prior to or during the hearing of such appeal, is of the opinion that on the ground of the disputes or legal principles arising or that may arise out of such appeal, such appeal should rather be heard by the tax court referred to
in section 33, such appeal must be set down for hearing de novo before the tax court.

2)   The provisions of section 83A(3) to (14) of the lncome Tax Act shall mutatis mutandis apply for the purposes of this section: Provided that-
 
a)   the references in section 83A(7)(b)(iii) and section
83A(9)(b)(iii) to a return of income shall be construed as references to a relevant return furnished under this Act;
 
b)   the reference in section 83A(10)(e) to an assessment in respect of which an appeal has been lodged shall be construed as including a reference to a decision, direction or supplementary direction of the Commissioner in respect of which an appeal has been lodged under this Act.
 
34. Appeals against decisions of tax court
 
1)   The appellant in proceedings before the tax court referred to in section 33 or the Commissioner may in the manner provided in section 86A of the lncome Tax Act appeal against any decision of that court.
 
2)   The provisions of section 86A of the lncome Tax Act and any regulations made under that Act relating to any appeal in terms of that section shall mutatis mutandis apply with reference to any appeal under this section.
 
35. Members of tax court not disqualified from adjudicating
 
A member of a tax court referred to in section 33 will not solely on account of any liability imposed upon him under this Act be regarded as interested in any matter upon which he may be called upon to adjudicate thereunder.
 
36. Payment of tax pending appeal
 
1)   Unless the Commissioner otherwise directs in terms of subsection (4)-
 
a)   the obligation to pay; and

 
 
 
 

                        

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b)   the right to receive and recover,
 
any tax, additional tax, penalty or interest chargeable under this Act shall not be suspended by any objection or appeal or pending the decision of a court of law.
 
2)   A vendor may request the Commissioner to suspend the payment of any tax or a portion thereof due under an assessment where the liability to pay that tax is disputed.
 
3)   The Commissioner may suspend payment of the disputed tax having regard to-
 
a)   the compliance history of the vendor;
 
b)   the amount of tax involved;
 
c)   the risk of dissipation of assets by the vendor concerned during the period of suspension;
 
d)   whether the vendor is able to provide adequate security for the payment of the amount involved;
 
e)   whether payment of the amount involved would result in irreparable financial hardship to the vendor;
 
f)    whether sequestration or liquidation proceedings are imminent;
g)   whether fraud is involved in the origin of the dispute; or h)   whether the vendor has failed to furnish any
information requested by the Commissioner in terms of
this Act for purposes of a decision under this section.
 
4)   The Commissioner may deny a request in terms of subsection (3) or revoke a decision to suspend payment in terms of that subsection with immediate effect whenever he or she is satisfied that-
 
a)   after the lodging of the objection, the objection or appeal is frivolous or vexatious;

b)   the vendor is employing dilatory tactics in conducting the objection or appeal;
 
c)   on further consideration of the factors contemplated in subsection (3), the suspension should not have been given; or
 
d)   there is a material change in any of the factors described in subsection (3), upon which the decision to suspend the amount involved was based.
 
5)   Where any assessment is altered in accordance with- a)   an objection or appeal;
b)   a decision by a court of law; or
 
c)   a decision by the Commissioner to concede the appeal to the tax board or the tax court of that court of law,
 
a due adjustment must be made, amounts paid in excess refunded with interest at the prescribed rate (but subject to the provisions of sections 45(1) and 45(A)), the interest
being calculated from the date that excess was received by the Commissioner to the date the refunded tax is paid, and amounts short-paid being recoverable with penalty and interest calculated as provided in section 39(1).
 
6)   The payment by the Commissioner of any interest under the provisions of this section shall be deemed to be a drawback from revenue charged to the National Revenue Fund
 
37. Burden of proof
 
The burden of proof that any supply or importation is exempt from or not liable to any tax chargeable under this Act or is subject to tax at the rate of zero per cent or that any value upon which tax is chargeable under this Act or any amount of tax chargeable under this Act is subject to any deduction or set-off or that any amount should be deducted as input tax,

 
 
 
 

                        

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shall be upon the person claiming such exemption, non-liability, rate of zero per cent, deduction or set-off, and upon the
hearing of any appeal from any decision of the Commissioner, the decision shall not be reversed or altered unless it is shown by the appellant that the decision is wrong.

VI. Payment, Recovery and Refund Tax
 
38. Manner in which tax shall be paid
 
1)   Subject to the provisions of section 7(3)(d) and section
13(5)and (6), the tax payable under this Act must be paid in full within the time allowed by section 14 or section 28 or section 29, whichever is applicable.
 
2)   Where the Commissioner is satisfied that due to circumstances beyond the control of the person liable for the payment of the tax the amount of tax due cannot be accurately calculated within the time allowed by section 14 or section 28 or section 29, whichever is applicable, the Commissioner may in his discretion and subject to such conditions as he may impose, agree to accept a payment of a deposit by such person of an
amount equal to the estimated liability of such person for such tax.
 
3)   Such payment shall be deemed to be a provisional payment in respect of the liability of the said person for such tax, as finally determined, and when such liability is so determined any amount paid in excess shall be
refundable to such person and any amount short-paid shall be recoverable from him.
 
39. Penalty and interest for failure to pay tax when due
 
1)

 
a)   If any person who is liable for the payment of tax and is required to make such payment in the manner prescribed in section 28(1), fails to pay any amount of such tax within the period for the payment of such tax specified in the said provision, he shall, in addition to such amount of tax, pay-
 
i)    a penalty equal to 1O per cent of the said amount

 
 
 
 

                        

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of tax; and
 
ii)   where payment of the said amount of tax is made on or after the first day of the month following the month during which the period allowed for payment of the tax ended, interest on the said amount of tax, calculated at the prescribed rate (but subject to the provisions of section 45A) for each month or part of a month in the period reckoned from the said first day.
 
b)   Where any amount of tax has in relation to any tax period of any vendor been refunded to the vendor in terms of the provisions of section 44(1), read with section 16(5), or has in relation to that period been set off against unpaid tax in terms of the provisions of section 44(6), and such amount was in whole or in part not properly refundable to the vendor under section
16(5), so much of such amount as was not properly so refundable shall for the purposes of paragraph (a)(i) be deemed to be an amount of tax required to be paid by the vendor within the said period and for the purposes of paragraph (a)(ii), an amount of tax required to be paid by the vendor during the period in which the refund was made.
 
2)   If any person who is liable for the payment of tax in accordance with the provisions of section 29 fails to pay any amount of such tax within the period allowed for the payment of such tax in terms of that section, he shall, in addition to such amount of tax, pay-
 
a)   a penalty equal to 1O per cent of the said amount of tax; and
 
b)   where payment of the said amount of tax is made on or after the first day of the month following the month during which the period allowed for payment of the tax ended, interest on the said amount of tax, calculated at

the prescribed rate (but subject to the provisions of section 45A) for each month or part of a month in the period reckoned from the said first day.
 
3)   If any person who is liable for the payment of tax in accordance with the provisions of section 8(2C) or 8(2D) fails to pay any amount of such tax within the period allowed for the payment of such tax in terms of that
section, the person shall, in addition to such amount of tax, pay where payment of the said amount of tax is made on
or after the first day of the month following the month during which the period allowed for payment of the tax ended, interest on the said amount of tax, calculated at the prescribed rate (but subject to the provisions of section
45A) for each month or part of a month in the period reckoned from the said first day.
 
4)   Where any importer of goods which are required to be entered under the Customs and Excise Act, fails to pay any amount of tax payable in respect of the importation of the goods on the date on which the goods are entered under the said Act for home consumption in the Republic or the date on which customs duty is payable in terms of the said Act in respect of the importation or, if such duty is not payable, the date on which it would be so payable if it had been payable, whichever date is later, that importer shall, in addition to such amount of tax pay-
 
a)   a penalty equal to 1O per cent of the said amount of tax; and
 
b)   where payment of the said amount of tax is made on or after the first day of the month following the month during which the period allowed for payment of the tax ended, interest on the said amount of tax, calculated at the prescribed rate (but subject to the provisions of section 45A) for each month or part of a month in the period reckoned from the said first day.

 
 
 
 

                        

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5)   Where any person who is liable for the payment of tax fails to pay any amount of such tax on the date on which in terms of the Customs and Excise Act, liability arises for the payment of the excise duty or environmental levy referred to in section 7(3)(a), that person shall, in addition to such amount of tax, pay-
 
a)   a penalty equal to 10 per cent of the said amount of tax; and
 
b)   where payment of the said amount of tax is made on or after the first day of the month following the month during which the period allowed for payment of the tax ended, interest on that amount of tax, calculated at the prescribed rate (but subject to the provisions of section
45A) for each month or part of a month in the period reckoned from the said first day.
 
6)   If any person who is liable for the payment of tax and is required to make such payment in the manner prescribed
in section 14, fails to pay any amount of such tax within the period allowed for payment of such tax in terms of the said section, he shall in addition to such amount of tax, pay-
 
a)   a penalty equal to 10 per cent of the said amount of tax; and
 
b)   where payment of the said amount of tax is made on or after the first day of the month following the month during which the period allowed for payment of the tax ended, interest on the said amount of tax, calculated at the prescribed rate (but subject to the provisions of section 45A) for each month or part of a month in the period reckoned from the said first day.
 
6A) If any person who is liable for the payment of additional tax in accordance with the provisions of section 60 fails to pay any amount of such tax on or before the last business day of the month in which the last day of the period allowed for the payment of such tax in terms of that section falls, he

shall, in addition to such amount of tax, pay interest on the said amount of tax, calculated at the prescribed rate (but subject to the provisions of section 45A) for each month or part of a month during which the said tax is not paid.
 
7)   Where the Commissioner is satisfied that the failure on the part of the person concerned or any other person under the control or acting on behalf of that person to make payment of the tax within the period for payment contemplated in subsection (1)(a), (2), (3), (4), (6), (6A) or (8) or on the date referred to in subsection (5), as the case may be-
 
a)   was due to circumstances beyond the control of the said person he or she may remit, in whole or in part, the interest payable in terms of this section; or
 
b)   was not due to an intent not to make payment or to postpone liability for the payment of the tax, he or she may remit, in whole or in part, any penalty payable in terms of this section.
 
8)   Notwithstanding anything to the contrary in this section,
the Commissioner may prescribe, by notice in the Gazette, that any interest on any outstanding amount payable in terms of this Act, is calculated on the daily balance owing and compounded monthly from such date and for such period as the Commissioner may prescribe.
 
40. Recovery of tax
 
1)   Any amount of any tax, additional tax, penalty or interest payable in terms of this Act shall, when it becomes due or is payable, be a debt due to the State and shall be
recoverable by the Commissioner in the manner hereinafter provided.
 
2)
 
a)   If any person fails to pay any tax, additional tax, penalty or interest payable in terms of this Act, when it becomes due or is payable by him, the Commissioner

 
 
 
 

                        

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may file with the clerk or registrar of any competent court a statement certified by him as correct and setting forth the amount thereof so due or payable by that person, and such statement shall thereupon have all the effects of, and any proceedings may be taken thereon as if it were, a civil judgment lawfully given in that court in favour of the Commissioner for a liquid debt of the amount specified in the statement.
 
b)   The Commissioner may by notice in writing addressed to the aforesaid clerk or registrar, withdraw the statement referred to in paragraph (a), and such statement shall thereupon cease to have any effect: Provided that the Commissioner may institute proceedings afresh under that paragraph in respect of any tax, additional tax, penalty or interest referred to in the withdrawn statement.
 
c)   The Commissioner may institute proceedings for the sequestration of the estate of any person and shall for the purposes of such proceedings be deemed to be the creditor in respect of any tax, additional tax, penalty or interest payable by such person under the provisions of this Act.
 
3)   Notwithstanding anything contained in the Magistrates' Courts Act, 1944 (Act No. 32 of 1944), a statement for any amount whatsoever may be filed in terms of subsection (2)(a) with the clerk of the magistrate's court having jurisdiction in respect of the person by whom such amount is payable in accordance with the provisions of this Act.
 
4)   Where, in addition to any amount of tax or additional tax which is due or is payable by any person in terms of this Act, any amount of interest or penalty is payable by him in terms of section 39, any payment made by that person in respect of such tax. additional tax, interest or penalty
which is less than the total amount due by him in respect of such tax, additional tax, interest and penalty shall for the

purposes of this Act be deemed to be made- a)   in respect of such penalty interest; and
b)   to the extent that such payment exceeds the amount of such penalty, in respect of such interest; and
 
c)   to the extent that such payment exceeds the sum of the amounts of such penalty and interest, in respect of such tax or additional tax.
 
5)   It shall not be competent for any person in proceedings in connection with any statement filed in terms of subsection (2)(a) to question the correctness of any assessment upon which such statement is based, notwithstanding that objection and appeal may have been lodged against such assessment.
 
40A. Liability of public authorities and certain public entities for tax and limitation of refunds
 
1)   This section applies in respect of the supply of goods or services on or before 31 March 2005 by any public authority or public entity listed in Schedule 1 or Part A or C
of Schedule 3 to the Public Finance Management Act, 1999 (Act No. 1 of 1999).
 
2)   Where the Commissioner on or before 31 March 2005 issued an assessment for an amount of tax or additional tax in respect of any supply of goods or services contemplated in subsection (1), to correct a prior incorrect application of the zero per cent rate of tax in terms of
section 11(2)(p) in respect of that supply, the Commissioner must, on written application, reduce that assessment to the extent that the amount of tax, additional tax, penalty or interest arose as a result of that correction and was not yet paid on that date:
 
Provided that the reduced assessment will not result in a refund to that public authority or public entity.

 
 
 
 

                        

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3)   The Commissioner may not after 31 March 2005 make any assessment to correct a prior incorrect application of the zero per cent rate of tax in terms of section 11(2)(p) in respect of any supply of goods or services contemplated in subsection (1).
 
4)   If a public authority or public entity incorrectly charged tax at the rate referred to in section 7(1) instead of the zero per cent rate of tax in terms of section 11(2)(p) in respect of any supply contemplated in subsection (1), the Commissioner may not refund any such tax or any penalty or interest that arose as a result of the late payment of such tax, paid by that public authority or public entity to the Commissioner.
 
40B. Liability of municipalities for tax and limitation of refunds
 
1)   This section applies in respect of the supply of goods or services on or before 31 March 2005 by any entity which at the time of that supply qualified as a 'local authority' as defined prior to the deletion of that definition by the Small Business Amnesty and Amendment of Taxation Laws Act,
2006.
 
2)   Where the Commissioner on or before 31 March 2005 issued an assessment for an amount of tax or additional tax in respect of any supply of goods or services contemplated in subsection (1) to correct a prior incorrect application of the zero rate of tax in terms of section
11(2)(p) as it read on 31 March 2005 in respect of that supply, the Commissioner must, on written application, reduce that assessment to the extent that the amount of tax, additional tax, penalty or interest arose as a result of that correction and was not yet paid on that date as long as the reduced assessment will not result in a refund to that entity.
 
3)   The Commissioner may not after 31 March 2005 make any assessment to correct a prior incorrect application of the zero per cent rate of tax in terms of section 11(2)(p) as it

read on 31 March 2005 in respect of any supply of goods or services contemplated in subsection (1).
 
4)   If a local authority incorrectly charged tax at the rate
referred to in section 7(1) instead of the zero per cent rate of tax in terms of section 11(2)(p) as it read on 31 March 2005 in respect of any supply contemplated in subsection (1), the Commissioner may not refund any such tax or any penalty or interest that arose as a result of the late payment of such tax, paid by that local authority to the Commissioner.
 
40C. Liability of bargaining councils or political parties for tax and limitation of refunds
 
1)   This section applies in respect of the supply of goods or services contemplated in section 12(l) or (m) before 1
January 2013, by any bargaining council or political party, as the case may be
 
2)   Where the Commissioner before 1 January 2013, issued an assessment to levy tax at the rate referred to in section 7(1) in respect of any supply of goods or services contemplated in subsection (1) , the Commissioner must, on written application, reduce that assessment to the extent that the amount of tax, additional tax, penalty or interest in respect of that assessment was not yet paid on that date: Provided that the reduced assessment will not ressult in a refund to that bargaining council or political party.
 
3)   The Commissioner may not after 1 January 2013 make any assessment in respect of any supply of goods or services contemplated in subsection (1).
 
4)   If a bargaining council or political party charged tax at the rate referred to in section 7(1) in respect of supply of any supply contemplated in subsection (1), the Commissioner may not refund any such tax or any penalty or interest that arose as a result of the late payment of such tax, received or accrued from that bargaining council or political party to the Commissioner.

 
 
 
 

                        

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41. Liability for tax in respect of certain past supplies or importations
 
Notwithstanding anything to the contrary in this Act -
 
a)   no amount of tax otherwise properly chargeable and payable by any person or not deductible by him under this Act, shall be recoverable by the Commissioner in respect of any past supply of goods or services or any past importation of goods if, in terms of a general written ruling by the Commissioner or a general oral ruling given by him prior to 9 July 1993 which had not been withdrawn by him at the time at which the said person became contractually
obliged to supply or receive such goods or services, as the case may be, no tax was payable or a deduction was allowed in respect of such supply or importation;
 
b)   no further amount of tax shall be recoverable by the Commissioner in respect of or in relation to any past supply of goods or services or any past importation of goods if, in terms of a general written ruling by the Commissioner or a general oral ruling given by him prior to 9 July 1993 which had not been withdrawn by him at the time of such supply or importation, the tax payable or deductible in respect of such supply or importation had been calculated and paid
or had been deducted in accordance with such ruling, as the case may be;
 
c)   where any written decision or, prior to 9 July 1993 an oral decision has been given by the Commissioner-
 
i)    to the effect that any person is required or not required to be registered as a vendor in terms of the provisions of this Act; or
 
ii)   as to the taxable or non-taxable nature of any supply of goods or services by any person or of the importation
of goods by any person (including any decision as to the applicability of any exemption or rate of zero per cent) or as to the deductibility or non-deductibility in

terms of section 16(3) of tax in respect of the supply to any person of goods or services or the importation by any person of goods,
 
and such decision is subsequently withdrawn, such withdrawal shall, as respects any contractual obligation incurred in accordance with the decision given by the Commissioner by the person concerned before such withdrawal to supply or receive the goods or services concerned, not affect the liability or non- liability of that person for the payment of tax in accordance with such decision or his entitlement or otherwise to a deduction of tax, as determined in accordance with such decision, as the case may be,
provided such decision was accepted by the said person and all the material facts were known to the Commissioner when the decision was given:
 
d)   where-
 
i)    any amount of tax chargeable under this Act in respect of a supply of goods or services has not been returned in any return required to be furnished under section 28 or 29 and in which the said amount is required to be returned; or
 
ii)   any amount of tax chargeable under this Act in respect of the importation of goods was not paid-
 
or
 
iiA) any amount of tax chargeable under section 7(3)(a) was not paid on the date on which liability arose for the payment of the excise duty referred to in that section;
or
 
iii)  any amount of tax chargeable under this Act in respect of a supply of imported services has not been accounted for and paid as required by section 14(1); or

 
 
 
 

                        

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iv)  any amount of tax has been incorrectly deducted in terms of section 16(3) in any return required to be furnished under section 28,
 
and in consequence thereof an amount of tax which should have been paid to the Commissioner, or the Managing Director of the South African Post Office Limited in terms of this Act has not been paid, that amount shall not be recoverable by the Commissioner after the expiration of a period of five years reckoned from the date
on which that amount became payable in terms of this Act, if it is shown-
 
aa) that the failure to pay the amount which should have been paid was nor due to an intent of the person concerned or any other person under the control or acting on behalf of that person not to make payment of tax; and
 
bb) that the person responsible for the payment of the amount which should have been paid acted in good faith and on an assumption that an exemption or a rate of zero per cent was in fact applicable in respect of the supply referred to in subparagraph (i) or the importation referred to in subparagraph (ii) or the supply referred to in subparagraph (iii) or that any such supply was not subject to tax under this Act, or that the amount of tax referred to in subparagraph (iiA) was not payable, or that a deduction in respect of the amount referred to in subparagraph (iv) was in fact applicable, as the case may be; and
 
cc) that the said assumption was based on reasonable grounds and not due to negligence on the part of the said person:
 
Provided that this paragraph shall not apply if the
Commissioner has not later than the end of the said

period issued an assessment in respect of the unpaid tax.
 
: Provided further that paragraphs (a), (b) and (c) shall not apply to-
 
i)    a written decision or a general written ruling issued by the Commissioner prior to 1 January 2007 in respect of supplies which are or will be made or goods imported on or after 1 January 2007, except to the extent that
the Commissioner prescribes in writing that the written decision or the general written ruling has binding effect on or after that date; or
 
ii)   a written decision or a general written ruling issued by the Commissioner on or after 1 January 2007.
 
41A. VAT Rulings and VAT class rulings
 
[repealed by section 26 of the Taxation Laws Second
Amendment Act No. 9 of 2007]
 
418. VAT class ruling and VAT ruling
 
1)   The Commissioner may issue a VAT class ruling or a VAT ruling and in applying the provisions relating to Part IA of Chapter III of the Income Tax Act, a VAT class ruling or a VAT ruling must be dealt with as if it were a binding class ruling or a binding private ruling, respectively:
 
Provided that-
 
i)    the provisions of subsections (2)(k), (2)(l) and (5) of section 76E and section 76F of the Income Tax Act shall not apply to any VAT class ruling or VAT ruling;
 
ii)   an application for a VAT class ruling or a VAT ruling in terms of this section shall not be accepted by the Commissioner if the application-
 
aa) is for an advance tax ruling that qualifies for acceptance in terms of section 41A; and

 
 
 
 

                        

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bb) falls within a category of rulings prescribed by the Minister by regulation for which applications for rulings in terms of this section may not be accepted.
 
2)  For the purposes of this section-
 
'VAT class ruling' means a written statement issued by the Commissioner to a class of vendors or persons regarding the interpretation or application of this Act;
 
'VAT ruling' means a written statement issued by the Commissioner to a person regarding the interpretation or application of this Act.
 
3)   [deleted by the Revenue Laws Second Amendment Act No.
61 of 2008]
 
42. Evidence as to assessments
 
The production of any document issued by the Commissioner purporting to be a copy of or an extract from any notice of assessment shall be conclusive evidence of the making of such assessment and shall, except in the case of proceedings on appeal against the assessment, be conclusive evidence that
the amount and all the particulars of such assessment appearing in such document are correct.
 
43. Security for tax
 
1)   The Commissioner may, in the case of any vendor-
 
a)   who has been convicted of any offence under this Act, or any other Act administered by the Commissioner, or who has repeatedly failed to pay amounts of tax due by him or to carry out other obligations imposed upon him by this Act, or any other Act administered by the Commissioner; or
 
b)   who is under the management or control of a person who is or was a vendor contemplated in paragraph (a); or

c)   who is under the management or control of a person, where that person is or was managing or controlling another person who is or was a vendor contemplated in paragraph (a),
 
by written notice to such vendor require him, within such period as the Commissioner may allow, to furnish to or deposit with the Commissioner security for the payment of any tax, additional tax, penalty or interest which has or may become payable by such vendor in terms of this Act.
 
2)   Such security shall be of such nature, for such amount and in such form as the Commissioner may direct.
 
3)   Where the Commissioner has directed that such security shall be in the form of a cash deposit and the vendor fails to make such deposit within the period allowed by the Commissioner, the amount of such deposit shall be recoverable from the vendor in terms of the provisions of section 40 as though such amount were an amount of tax due by the vendor.
 
4)   Where such security is in the form of a cash deposit, the amount deposited maybe set off in whole or in part by the Commissioner against any liability of the vendor for any
tax, additional tax, penalty or interest in terms of this Act or such amount (or the balance thereof remaining after deducting any portion thereof which has been so set off) may be repaid by the Commissioner to the vendor when
the Commissioner is satisfied that the security is no longer required.
 
5)   Notwithstanding the provisions of subsection (1), the Commissioner may, having regard to the circumstances of any vendor which is not a natural person, require of any or all of the members, shareholders or trustees involved in the management of such vendor to enter into contract of suretyship in respect of the vendor's liability for tax which may arise from time to time.

 
 
 
 

                        

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6)   Such suretyship shall be for such amount and for such period as the Commissioner may direct and for the duration thereof, the said members, shareholders or trustees may jointly and severally with the vendor be held liable for paying the tax imposed on the vendor.
 
44. Refunds
 
1)   Any amount of tax which is refundable to any vendor in terms of section 16(5) in respect of any tax period shall, to the extent that such amount has not been set off against unpaid tax in terms of subsection (6) of this section, be refunded to the vendor by the Commissioner: Provided that-
 
i)    the Commissioner shall not make a refund under this subsection unless the claim for the refund is received by the Commissioner within five years after the end of the said tax period; or
 
ii)   where the amount that would be so refunded to the vendor is determined to be less than R100, or less than such other amount as the Commissioner may
determine by notice in the Gazette, the amount so determined shall not be refunded in respect of the said tax period but shall be carried forward to the next succeeding tax period of the vendor and be accounted for as provided in section 16(5).
 
2)   Subject to the provisions of subsection (3), where-
 
a)   any amount of tax, additional tax, penalty or interest paid by any person in terms of this Act to the Commissioner was in excess of the amount of tax, additional tax, penalty or interest, as the case may be, that should properly have been charged under this Act; or
 
b)   any amount refunded to a vendor in terms of subsection (1) was less than the amount properly refundable under that subsection,

the Commissioner shall, on application by the person concerned, refund the amount of tax, additional tax, penalty or interest paid in excess or the amount by which the amount refunded was less than the amount properly refundable, as the case may be.
 
3)   The Commissioner shall not make a refund under subsection (2), unless-
 
a)   the claim for the refund of such excess amount of tax, additional tax, penalty or interest is received by the Commissioner within five years after the date upon which payment of the amount claimed to be refundable was made: Provided that if the Commissioner is satisfied that such payment was made in accordance with the practice generally prevailing at the said date,
no refund shall be made unless the claim for any refund is received by the Commissioner within six months
after that date; or
 
b)   the amount to be refunded is more than R100 or more than such other amount as the Commissioner may determine by notice in the Gazette; or
 
c)   the Commissioner is satisfied that any amount of output tax claimed to be refundable to a vendor will, if such amount has been borne by any other person, in turn be refunded by the vendor to such other person.
 
d)   the vendor has furnished the Commissioner in writing with particulars of the enterprise's banking account or account with a similar institution to enable the Commissioner to transfer a refund or other amount due to the vendor to such account: Provided that where the vendor which is-
 
i)    a company that is not a resident of the Republic requests that a refund or other amount be transferred to a bank account or an account with a similar institution in the Republic other than that

 
 
 
 

                        

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ii)

account of the vendor; or
 
 
aa) a subsidiary company, as defined in section 1 of the Companies Act, 1973 (Act No. 61 of
1973), of a holding company, as defined in section 1 of the Companies Act, 1973 (Act No.
61 of 1973), requests that a refund or other amount be transferred to the bank account or the account with a similar institution in the Republic of that holding company;
 
bb) a subsidiary company, as defined in section 1 of the Companies Act, 1973 (Act No. 61 of
1973), requests that a refund or other amount be transferred to the bank account or the account with a similar institution in the Republic of another subsidiary company of its
holding company, as defined in section 1 of the
Companies Act, 1973 (Act No. 61 of 1973); or
 
cc) a holding company, as defined in section 1 of the Companies Act, 1973 (Act No. 61 of 1973), requests that a refund or other amount be transferred to the bank account or the account with a similar institution in the Republic of its subsidiary company, as defined in section 1 of the Companies Act, 1973 (Act No. 61 of 1973),
 
the vendor must notify the Commissioner in writing and must indemnify the Commissioner against any loss by the vendor or the State as a result of such instruction.

be refunded but shall be credited to the vendor's account and be accounted for as provided in section 16(5).
 
5)   Notwithstanding the provisions of Paragraph (ii) of the proviso to subsection (1) and the provisions of subsection (4) any amount determined to be refundable to a vendor in respect of his final tax period on the cancellation of his registration as a vendor shall be refundable to him in full.
 
6)   Where any refund contemplated in this section is due to any vendor who has failed to pay any amount of tax, additional tax, duty, levy, charge, interest or penalty levied or imposed in terms of this Act or any other law administered by the Commissioner within the period prescribed for payment of such amount, the Commissioner may set off against such amount which such vendor has failed to pay, the amount which has become refundable under this section or any interest which has become payable to the vendor in terms of section 45.
 
7)   Where the vendor has failed to furnish a return for any tax period as required by this Act, the Commissioner may withhold payment of any amount refundable to the vendor under subsection (1) or any amount of interest payable to the vendor in terms of section 35 until the vendor has furnished such return as so required.
 
8)   If the Commissioner refuses to make or authorize a refund in terms of this section he shall, give written notice of such refusal.
 
9)   The Commissioner may make or authorise a refund of any amount of tax which has become refundable to any person under the provisions of the regulation referred to in the definition of 'exported ' in section 1.

4)   Where the amount that would be refunded under
subsection (2) is determined to be less than R100 or such other amount as the Commissioner may determine by notice in the Gazette, the amount so determined shall not


45. Interest on delayed refunds
 
1)   Where the Commissioner does not within the period of 21 business days after the date on which the vendor's return

 
 
 
 

                        

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in respect of a tax period is received by an office of the South African Revenue Service, refund any amount refundable in terms of section 44(1), interest shall be paid on such amount at the prescribed rate (but subject to the provisions of section 45A) and calculated for the period commencing at the end of the first-mentioned period to the date of payment of the amount so refundable: Provided
that-
 
i)    where such return made by the vendor is incomplete or defective in any material respect the said period of 21 business days shall be reckoned from the date on
which-
 
aa) the vendor rectifies the return and satifies the Commissioner in writing that the incompleteness or defectiveness of the return does not affect the amount refundable; or
 
bb) information is received by the Commissioner to enable him to make an assessment upon the
vendor reflecting the amount properly refundable to the vendor;
 
iA) where the vendor is in default in respect of any of his obligations under this Act or any other Act administered by the Commissioner, to furnish a return
as required by such Act, the said period of 21 business days shall be reckoned from the date on which any such outstanding return or reutrns furnished by the vendor as required by such Act are recieved by an office of the South African Revenue Service.;
 
ii)   where the Commissioner is prevented from satisfying himself as to the amount refundable in terms of section
44(1) by reason of not being able to gain access to the books and records of the vendor concerned after having, within a reasonable time, made a request by registered post, facsimile transmission, electronic

means or personal delivery, to the vendor for access to such books and records during the period of 21 business days contemplated in this subsection, the said period of 21 business days shall be suspended
from the date of dispatch of such request by registered post, facsimile transmission, electronic means or the date of delivery of the personal delivery, until the date on which such access is granted;
 
iiA) where the vendor-
 
aa) has not furnished the Commissioner with the particulars of the banking account of the enterprise; or
 
bb) has not notified the Commissioner that a refund or other amount be transferred to a bank account or an account with a similar institution other than that of the vendor as contemplated in the proviso to section 44(3)(d),
 
the said period of 21 days shall be reckoned from the date the vendor furnishes the Commissioner with the particulars of the bank account or account with a similar institution of the enterprise or from the date the vendor has notified the Commissioner that a refund or other amount be transferred to a bank account or an account with a similar institution other than that of the vendor;
 
iii)  where the vendor is not a resident of the Republic and-
 
aa) has not appointed a representative vendor as contemplated in section 48(1) in the Republic or has not furnished the Commissioner with particulars of such representaive vendor; or
 
bb) has not opened a banking account in the Republic as required by paragraph (ii)(bb) of the proviso to

 
 
 
 

                        

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section 23(2) or has not furnished the Commissioner with the particulars of such banking account,
 
the said period of 21 business days shall be reckoned from the date the vendor furnishes the Commissioner with the particulars of such representative vendor or banking account, as the case may be.
 
2)   Where the amount of any interest paid to a person in terms of subsection (1) is in excess of the current amount, the Commissioner may recover the amount of the excess
under section 40(2)(a) as if it were tax payable by such person.
 
3)   The payment by the Commissioner of any interest under the provisions of this section shall be deemed to be a drawback from revenue charged to the National Revenue Fund.
 
45A. Calculation of interest payable under this Act
 
Where-
 
a)   any interest is payable under the provisions of section
36, 39 or 45;
 
b)   the rate at which such interest is payable has with effect from any date been altered; and
 
c)   such interest is payable in respect of any period or any number of months or any part of a month which commenced before the said date,
 
the interest to be determined in respect of that portion of such period which ended immediately before the said date or in respect of any such months or part of a month which commenced before the said date shall be calculated as if the said rate had not been so altered.

VII. Representative Vendors
 
46. Persons Acting in a Representative Capacity
 
The natural person who is a resident of the Republic responsible for performing the duties imposed by this Act-
 
a)   on any company shall be the public officer thereof contemplated in section 101 of the Income Tax Act or, in
the case of any company which is placed in liquidation, the liquidator thereof;
 
b)   on any public authority shall be any person responsible for accounting for the receipt and payment of moneys under the provisions of any law or for the receipt and payment of moneys or funds on behalf of such public authority;
 
c)   on a municipality shall be any person responsible for accounting for the receipt and payment of moneys or funds on behalf of such municipality:
 
d)   on any corporate or unincorporate body (other than a company) shall be any person who is the treasurer of that body or whose functions are similar to those of a treasurer of that body;
 
e)   on a person under legal disability shall be his guardian, curator or administrator or the other person having the management or control of his affairs;
 
f)    on any person who is not a resident of the Republic or any person (other than a company) who is for the time being out of the Republic, shall be any agent of such person controlling such person's affairs in the Republic or any manager of any enterprise of such person in the Republic;
 
g)   on a deceased person or his estate shall be the executor or administrator of such estate;
 
h)   on an insolvent person or his estate shall be the trustee or

 
 
 
 

                        

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administrator of such estate;
 
i)    on any trust fund shall be the person administering the fund in a fiduciary capacity;
 
j)    on a foreign donor funded project shall be any person responsible for accounting for the receipt and payment of moneys or funds on behalf of such foreign donor funded project.
 
Provided that nothing herein contained shall be construed as relieving any such company, public authority, municipality, body or person or any member of a partnership referred to in section
51(3) from having to perform any duties imposed by this Act upon such company, public authority, municipality, body or person which the first-mentioned person has failed to perform.
 
47. Power to appoint agent
 
The Commissioner may, if he thinks it necessary, declare any person to be the agent of any other person, and the person so declared an agent shall for the purposes of this Act be the agent of such other person in respect of the payment of any amount of tax, additional tax, penalty or interest payable by such other person under this Act and may be required to make payment of such amount from any moneys which may be held by him for or be due by him to the person whose agent he has been declared to be: Provided that a person so declared an agent who, is unable to comply with a requirement of the
notice of appointment as agent, must advise the Commissioner in writing of the reasons for not complying with that notice within the period specified in the notice.
 
48. Liability of representative vendors
 
1)   For the purposes of this section "representative vendor" means-
 
a)   in relation to any company, public authority, municipality, body, trust fund or person referred to in

section 46, the person who is in terms of that section responsible for performing the duties imposed under this Act on such company, public authority, municipality, body, trust fund or person; and
 
b)   in relation to the other person referred to in section 47, any person declared by the Commissioner under that section to be the agent of that other person.
 
2)   Every representative vendor shall as respects moneys controlled or transactions concluded or anything done by him in his representative capacity be liable for the payment of any tax, additional tax, penalty or interest chargeable under this Act in relation to such moneys or transactions as though such liability had been incurred by him personally, but such liability shall be deemed to have been incurred by him in his representative capacity only.
 
3)   For purposes of subsection (2), any tax, additional tax, penalty or interest payable by any representative vendor in his representative capacity shall be recoverable from him, but to the extent only of any assets belonging to the person whom he represents which may be in his possession or under his management, disposal or control: Provided that any tax, additional tax, penalty or interest payable by a company shall not be recoverable from the
public officer of the company but shall be recoverable from the company.
 
4)   Every representative vendor or other person who is personally liable, who, as such, pays any tax, additional tax, penalty or interest due under this Act shall be entitled to recover the amount so paid from the person on whose
behalf it is paid, or to retain out of any moneys that may be in his possession or may come to him in his representative capacity, an amount equal to the amount so paid.
 
5)   Every representative vendor referred to in section 46(g)
who, as such, pays any tax, additional tax, penalty or

 
 
 
 

                        

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interest due under this Act by any deceased person shall
be entitled to recover the amount so paid from the estate of such deceased person or to retain out of any moneys of
the estate of such deceased person that may be in his possession or that may come to him as executor or administrator of such estate, an amount equal to the amounts so paid.
 
6)   Every representative vendor shall be personally liable for the payment of any tax, additional tax, penalty or interest payable by him in his representative capacity, to the extent that it remains unpaid,-
 
a)   he alienates, charges or disposes of any money received or accrued in respect of which the tax is chargeable; or
 
b)   he disposes of or parts with any fund or money belonging to the person whom he represents which is in his possession or comes to him after the tax, additional tax, penalty or interest has become payable, if such tax, additional tax, penalty or interest could legally have been paid from or out of such fund or money.
 
6A) The additional tax, penalty or interest payable by any representative vendor in terms of subsection (6) shall be recoverable by the Commissioner from that representative vendor.
 
7)   Every person who becomes a representative vendor (other than a person representing a company, public authority or municipality as contemplated in section 46(a), (b) or (c) or a person appointed as an agent under the provisions of section 47) shall within 21 days after becoming responsible for performing duties under this Act on behalf of any other person notify the Commissioner in such form as the Commissioner may prescribe, of the fact that he has become a representative vendor of that other person.

8)   Every representative vendor contemplated in section 48(1) shall remain responsible for performing the duties imposed on him by this Act until such time as he notifies the Commissioner in writing that he no longer acts as representative vendor, or until the Commissioner has been notified of the name and address of another person who shall act as representative vendor.
 
9)   Where a vendor is a company, every member, shareholder or director who controls or is regularly involved in the management of the company's overall financial affairs shall be personally liable for the tax, additional tax, penalty or interest for which the company is liable.
 
49. Remedies of Commissioner against agent or trustee
 
The Commissioner shall have the same remedies against all property of any kind vested in or under the control or management of any agent or person acting in a fiduciary capacity as he would have against the property of any person liable to pay any tax, additional tax, penalty or interest chargeable under this Act and in as full and ample a manner.

 
 
 
 

                        

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VIII. Special Provisions
 
50. Separate enterprises, branches and divisions
 
1)   Where separate enterprises are carried on by any vendor or an enterprise is carried on by any vendor in branches or divisions, the vendor may apply in writing to the Commissioner for any such separate enterprise, branch or division to be registered separately for the purposes of this Act.
 
2)   The Commissioner shall, upon application made under subsection (1), register any separate enterprise, branch or division as a separate vendor if each such separate enterprise, branch or division maintains an independent system of accounting and can be separately identified by reference to the nature of the activities carried on or the location of the separate enterprise, branch or division, and where any such separate enterprise, branch or division is so separately registered, the activities carried on by that separate enterprise, branch or division shall be deemed to be carried on by a person separate from the vendor referred to in subsection (1).
 
3)   The Commissioner may, with effect from a date determined by him, cancel any registration in terms of subsection (2) of any separate enterprise, branch or division, if-
 
a)   the vendor referred to in subsection (1) has applied to the Commissioner in writing for such registration to be cancelled; or
 
b)   it appears to the Commissioner that the duties or obligations of such separate enterprise, branch or division have not been satisfactorily performed or carried out,
 
and any activity carried on by that separate enterprise, branch or division shall as from the said date be deemed to

 
 
 
 

                        

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be carried on by the said vendor.
 
4)   The Commissioner shall cancel the separate registration of any separate enterprise, branch or division on the cancellation of the registration of the vendor referred to in subsection (1).
 
5)   Where any separate enterprise, branch or division separately registered under this section fails to do anything required to be done under this Act, the liability for the doing of that thing shall revert to the vendor referred to in subsection (1).
 
6)   Notwithstanding the preceding provisions of this section, any direction or determination of the Commissioner made under section 15 or 27 in respect of the vendor referred to in subsection (1) of this section shall, for the purposes of this Act, apply equally to each separate enterprise, branch or division of the vendor which is separately registered under this section: Provided that where a direction or determination is made by the Commissioner under subsection (2) of section 27 which applies in respect of any such separate enterprise, branch or division, this subsection shall not be construed as preventing the Commissioner from making a separate direction or determination under subsection (4) of the said section in
the circumstances contemplated in that subsection in respect of any other separate enterprise, branch or division of the said vendor.
 
50A. Separate persons carrying on same enterprise under certain circumstances deemed to be single person
 
1)   Notwithstanding the provisions of section 23, if the Commissioner makes a direction under this section, the persons named in the direction shall be deemed to be a single person carrying on the activities of an enterprise described in the direction and that person shall be liable to be registered in terms of section 23 with effect from the

date of the direction or, if the direction so provides, from such date as may be specified therein.
 
2)   The Commissioner shall not make a direction under this section naming any person unless he is satisfied-
 
a)   that such person is making or has made taxable supplies; and
 
b)   that the activities in the course of which he makes or made those taxable supplies form only part of certain activities which should properly be regarded as those of the enterprise described in the direction, the other
activities of that enterprise being carried on at that time or previously by one or more other persons; and
 
c)   that, if all the taxable supplies of that enterprise were taken into account, a person carrying on that enterprise should at that time be liable to be registered in terms of subsection (1); and
 
d)   that the main reason or one of the main reasons for the person concerned carrying on the activities first referred to in subparagraph (b) in the way he does is
the avoidance of a liability to be so registered (whether that liability would be his, another person's or that of two or more persons jointly).
 
3)   A direction made under this section shall be served on each of the persons named in it.
 
4)   Where, after a direction has been given under this section specifying a description of the enterprise, it appears to the Commissioner that a person who was not named in that direction is making taxable supplies in the course or furtherance of activities which should properly be regarded as part of the activities of that enterprise, the
Commissioner may make and serve on him a supplementary direction referring to the earlier direction and the description of the enterprise specified in it and

 
 
 
 

                        

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adding that person's name to those of the persons named in the earlier direction with effect from-
 
a)   the date on which he began to make those taxable supplies; or
 
b)   if it was later, the date with effect from which the single person referred to in the earlier direction became liable to be registered in terms of this section.
 
5)   If, immediately before a direction (including a supplementary direction) is made under this section, any person named in the direction is registered in respect of the taxable supplies made by him as contemplated in subsection (2) or (4), he shall cease to be liable to be so registered with effect from-
 
a)   the date with effect from which the single person concerned became liable to be registered; or
 
b)   the date of the direction, whichever date is the later.
6)   In relation to an enterprise specified in a direction (including a supplementary direction) under this section, the persons named in such direction, who together are deemed to be the liable person, are in subsections (7) and (8) referred to
as the members.
 
7)   For the purposes of this Act, where a direction is made under this section-
 
a)   the person carrying on the enterprise specified in the direction shall be registrable in such name as the members may jointly nominate upon compliance with the provisions of section 23(2);
 
b)   any supply of goods or services by or to one of the members in the course of the activities of such single person shall be deemed to be a supply by or to such

single person;
 
c)   each of the members shall be jointly and severally liable for any tax due by such single person;
 
d)   notwithstanding the provisions of paragraph (c), any failure by such single person to comply with any requirement imposed upon him by or under this Act shall be deemed to be a failure by each of the members severally; and
 
e)   subject to paragraphs (a) to (d) of this subsection, the members shall be deemed to be a body of persons carrying on the enterprise of such single person and any question as to the scope of the activities of that enterprise at any time shall be determined accordingly.
 
8)   If the Commissioner is of the opinion that any person who is one of the members should no longer be regarded as such for the purposes of subsection (7)(c) and (d) and the Commissioner gives notice to that effect, that person shall no longer be liable in terms of that subsection for anything done after the date specified in that notice and shall be deemed to have ceased to be a member of the body of persons referred to in subsection (7)(e).
 
51. Bodies of persons, corporate or unincorporate (other than companies)
 
1)   Subject to the provisions of section 46, where any body of persons, whether corporate or unincorporate (other than a company), carries on or is to carry on any enterprise-
 
a)   such body shall be deemed to carry on such enterprise as a person separate from the members of such body;
 
b)   registration of that body as a vendor shall be effected separately from any registration of any of its members in respect of any other enterprise;

 
 
 
 

                        

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c)   liability for tax in respect of supplies by the body shall be determined and calculated in respect of the enterprise carried on by it as an enterprise carried on independently of any enterprise carried on by any of its members, and any refund relating to the body's enterprise which is payable in terms of section 44 shall be made to that body; and
 
d)   the duties and obligations imposed by this Act on any vendor or other person shall, as respects the enterprise carried on by that body, be performed by it separately from the duties and obligations imposed on any of its members.
 
2)   Where any such body is a partnership or other unincorporated body and is dissolved in consequence of the retirement or withdrawal of one or more (but not all) of its members or the admission of a new member and a new partnership or unincorporated body comes into being consisting of the remaining members of the dissolved partnership or body, as the case may be, or such remaining members and one or more new members and the new partnership or body continues to carry on the enterprise of the dissolved partnership or body as a going concern, the dissolved partnership or body and the new partnership or body, as the case may be, shall (unless the Commissioner, having regard to the circumstances of the case, otherwise directs) for the purposes of this Act be deemed to be one and the same partnership or body, as the case may be.
 
3)   Subject to the provisions of section 46, every member of a partnership shall be liable jointly and severally with other members of the partnership for performing the duties of the partnership in terms of this Act and paying the tax imposed by this Act on the partnership in respect of supplies made by the partnership while such member was a member of
the partnership: Provided that this subsection shall not apply to any such member of a partnership who in relation

to that partnership is a partner en commandite or a special partner as defined in the Special Partnerships' Limited Liability Act, 1861 (Act No. 24 of 1861), of the Cape of Good Hope or in Law No. 1 of 1865 of Natal, who has not held himself out as an ordinary or general partner of the partnership concerned.
 
52. Pooling arrangements
 
1)   Any pool managed by any body for the sale of agricultural, pastoral or other farming products, being a pool contemplated in section 17 of the Marketing of Agricultural Products Act, 1996 (Act No. 47 of 1996), may, on written application by such body, for the purposes of this Act be deemed to be an enterprise or part of an enterprise carried on by that body separately from the members of such body: Provided that such body may-
 
elect in writing that the pool be treated as a separate enterprise for the purposes of this Act and may apply for such pool to be registered separately in terms of section 50
 
notwithstanding the provisions of section 54(1) and (2), if it makes an election in writing, be treated for the purposes of this Act as a principal and not as an agent of its members.
 
2)   Notwithstanding the provisions of section 54, any rental pool scheme operated and managed by any person for the benefit of some or all of-
 
a)   the owners of time-sharing interests in a property time- sharing scheme as defined in section 1 of the Property Time-sharing Control Act, 1983 (Act No. 75 of 1983);
 
b)   the owners of sectional title interests in a sectional title scheme as defined in section 1 of the Sectional Title Act, 1986 (Act No. 95 of 1986); or

 
 
 
 

                        

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c)   the shareholders in a Shareblock Company as defined in section 1 of the Shareblocks Control Act, 1980 (Act No. 59 of 1980),
 
is regarded for the purposes of this Act as a separate enterprise carried on by such person separately from the owners and shall be registered separately under section 50: Provided that-
 
i)    the owners or shareholders must elect in writing that the rental pool be treated separately; and
 
ii)   such a rental pool theme is, notwithstanding the provisions of section 54(1) and (2), treated for the purposes of this Act as a principal and not as an agent of the owners or shareholders.
 
53. Death or insolvency of vendor
 
1)
 
a)   Where, after the death of any vendor or the sequestration of his estate, any enterprise previously carried on by the vendor continues to be carried on by or on behalf of the executor or trustee of his estate or anything is done in connection with the termination of the enterprise, the estate of the vendor, as represented by the executor or trustee, as the case may be, shall
for the purposes of this Act be deemed to be a vendor in respect of the enterprise.
 
b)   Where the provisions of paragraph (n) are applicable, the deceased vendor and his estate or the vendor whose estate is sequestrated and his estate, as the case may be, shall, as respects the enterprise in question, be deemed for the purposes of this Act to be one and the same person.
 
2)   Where a mortgagee is in possession of any land or other property previously mortgaged by the mortgagor, being a

vendor, and the mortgagee carries on any enterprise of the mortgagor in relation to such land or other property, the mortgagee shall, from the date on which the mortgagee took possession of that land or other property, until such time as the mortgagee ceases to be in possession of that land or other property, be deemed, to the extent that the mortgagee carries on such enterprise, to be a vendor.
 
54. Agents and auctioneers
 
1)   For the purposes of this Act, where an agent makes a supply of goods or services for and on behalf of any
other person who is the principal of that agent, that supply shall be deemed to be made by that principal and not by that agent: Provided that, where that supply is a taxable supply and that agent is a vendor, the agent may, notwithstanding anything to the contrary in this Act, issue a tax invoice or a credit note or a debit note in relation to
such supply as if the agent had made a taxable supply, and to the extent that that tax invoice or credit note or debit
note relates to that supply, the principal shall not also issue a tax invoice or a credit note or a debit note, as the case may be.
 
2)   For the purposes of this Act, where any vendor makes a taxable supply of goods or services to an agent who is acting on behalf of another person who is the principal for the purposes of that supply, that supply shall be deemed to be made to that principal and not to such agent: Provided that such agent may nevertheless request that he be provided with a tax invoice and the vendor may issue a tax invoice or a credit note or debit note as if the supply were made to such agent.
 
2A)
 
a)   For the purposes of this Act, where any goods are imported into the Republic by an agent who is acting

 
 
 
 

                        

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on behalf of another person who is the principal for the purposes of that importation, that importation shall be deemed to be made by that principal and not by such agent: Provided that a bill of entry or other document prescribed in terms of the Customs and Excise Act in relation to that importation may nevertheless be held
by such agent.
 
b)   Notwithstanding the provisions of paragraph (a), where any goods are imported into the Republic by an agent who is acting on behalf of another person who is the principal for the purposes of that importation, and-
 
i)    the agent is a resigtered vendor; and
 
ii)   the principal is not a resident of the Republic and is not a registered vendor; and
 
iii)  the goods are imported by the principal for the purposes of a supply made or to be made by him to a person in the Republic; and
 
iv)  the agent obtains and retains documentary proof, as is acceptable to the Commissioner, that-
 
aa) he paid the tax on importation on behalf of that principal; and
 
bb) such agent and that principal agree in writing that the said tax has not and will not be reimbursed to such agent by that pricipal,
 
that importation shall for the purposes of this Act be deemed to be made by such agent and not by that principal.
 
3)   Where-
 
a)   a tax invoice or a credit note or debit note in relation to a supply has been issued-

(i)    by an agent as contemplated in subsection (1); or
 
(ii)  to an agent as contemplated in subsection (2); or
 
b)   a bill of entry or other document prescribed in terms of the Customs and Excise Act in relation to the importation of goods is held by an agent as contemplated in subsection (2A),
 
the agent shall maintain sufficient records to enable the name and address and VAT registration number of the principal to be ascertained and in respect of all supplies made on or after 1 January 2000 by or to the agent on behalf of the principal, the agent shall notify the principal in writing within 21 days of the end of the calendar month during which the supply was made or received, of the particulars contemplated in paragraphs (e), (f) and (g) of section 20(4) in relation to such supplies.
 
4)   For the purposes of subsection (5), the expression "auctioneer" means a vendor carrying on an enterprise which comprises or includes the supply by him by auction, of goods as an auctioneer or agent for or on
behalf of another person (hereinafter in this section referred to as a principal) and includes an agent, fresh produce agent and livestock agent as defined in section 1 of the Agricultural Produce Agents Act, 1992 (Act No. 12 of
1992).
 
5)   Notwithstanding anything in the preceding provisions of this section, where the principal and the auctioneer agree to have a supply by auction of any goods, other than a taxable supply, treated as if that supply were made by the auctioneer and not by the principal, the supply shall be
charged with tax as if it were made by the auctioneer in the course or furtherance of the auctioneer's enterprise and the auctioneer may-
 
a)   recover the amount of tax charged on that supply from

 
 
 
 

                        

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that principal as a debt together with the costs of recovery in any court of competent jurisdiction;
 
b)   retain or deduct such amount and costs out of any money in the auctioneer's hands belonging or payable to the principal:
 
Provided that the auctioneer or agent shall maintain the records contemplated in section 20(8) as if the principal made a supply of second-hand goods to him, not being a taxable supply.
 
6)   Notwithstanding anything in subsection (2), where any vendor makes a taxable supply (other than a supply that is charged with tax at the rate of zero per cent under section 11) of goods or services to an agent who is a vendor and is acting for or on behalf of another person who is the principal for the purposes of that supply,
and-
 
a)   he principal is not a resident of the Republic and is not a vendor; and

connection with the operation or management of any foreign-going ship or foreign-going aircraft,
 
this Act shall, where such agent and such principal agree, apply as if the supply were made to that agent and not to the principal.

 
b)
 
i)    the supply is directly in connection with either the exportation, or the arranging of the exportation, of goods from the Republic to any country or place outside the Republic, or the importation, or the arranging of the importation, of goods to the Republic from any country or place outside the Republic, including, in either case, the transportation of those goods within the Republic as part of such exportation or importation, as the case may be; or
 
ii)   the supply is of services which comprise the handling, pilotage, salvage or towage of any foreign-going ship or foreign-going aircraft while
present in the Republic or is of services provided in

 
 
 
 

                        

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IX. Compliance
 
55. Records
 
1)   Every vendor shall keep such books of account (which books of account, where generated by means of a computer, shall be retained in the form of a computer print- out) or other records as may enable him to observe the requirements of this Act and enable the Commissioner to satisfy himself that the vendor has observed such requirements, and every vendor shall, in particular, keep the following records and documents-
 
a)   a record of all goods and services supplied by or to the vendor showing the goods and services, the rate of tax applicable to the supply and the suppliers or their agents, in sufficient detail to enable the goods and services, the rate of tax, the suppliers or the agents to be readily identified by the Commissioner, and all invoices, tax invoices, credit notes, debit notes, bank statements, deposit slips, stock lists and paid cheques relating thereto: Provided that a vendor's records do
not have to show the rate of tax where the vendor has been authorised by the Commissioner to calculate the tax payable by him in accordance with a method prescribed by regulation, as contemplated in section
16(1);
 
aA) a record of all importations of goods and documents relating thereto as contemplated in section 16(2)(d);
 
aB) any documentary proof required to be obtained and retained in accordance with section 16(2)(f);
 
b)   the charts and codes of account, the accounting instruction manuals and the system and programme documentation which describe the accounting system used in each tax period in the supply of goods and services;

 
 
 
 

                        

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c)   any list required to be prepared in accordance with section 15(9); and
 
d)   any documentary proof required to be obtained and retained in accordance with section 11(3).
 
2)   Such books of account, records and documents referred to in subsection (1), whether in their original form or in a form authorized by the Commissioner in terms of subsection (4), shall at all reasonable times during the relevant period referred to in subsection (3) be open for inspection by any person acting under the authority of the Commissioner.
 
3)   All such books of account, records and documents, whether in their original form or in a form authorized by the Commissioner in terms of subsection (4)-
 
a)   required to be kept in terms of subsection (1) and section 73A of the Income Tax Act, shall be retained and carefully preserved by the vendor for the period referred to in the said section 73A; and
 
b)   required to be kept in terms of subsection (1), but in respect of which a return referred to in the said section
73A need not be submitted, shall-
 
i)    where kept in book form, be retained and carefully preserved by the vendor for a period of five years from the date of the last entry in any book; or
 
ii)   where not kept in book form, be retained and carefully preserved by the vendor for a period of five years after the completion of the transactions, acts or operations to which they relate.
 
4)
 
a)   The Commissioner may, subject to such conditions as

the Commissioner may determine. authorize the retention of the information contained in any records or documents referred to in subsection (3) (other than ledgers, cash books and journals) in a form, including any electronic form, acceptable to the Commissioner,
in lieu of the retention of the originals of such records or documents.
 
b)   The originals of any records or documents in respect of which the information therein contained is retained as contemplated in paragraph (a), shall be retained and carefully preserved for a period of one year from the beginning of the period for which the said records or documents should, but for the said paragraph (a), have been retained in terms of subsection (3).
 
57. General provisions with regard to information, documents or things
 
1)   For the purposes of this section and sections 57A, 578,
57C, 570 and 58-
 
"administration of this Act" means the-
 
a)   obtaining of full information in relation to the-
 
i)    supply by any vendor of goods and services supplied by him in the course or furtherance of any enterprise carried on by him;
 
ii)   importation of any goods into the Republic by any person; and
 
iii)  supply of any imported services by any person;
 
b)   ascertaining of the correctness of any return, financial statement, document declaration of facts or valuation;
 
c)   determination of the liability of any person for any tax and any interest or penalty in relation thereto leviable under this Act;

 
 
 
 

                        

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d)   collecting of any such liability;
 
e)   ascertaining whether an offence in terms of this Act has been committed;
 
f)    ascertaining whether a person has, other than in relation to a matter contemplated in paragraphs (a), (b), (c), (d) and (e) of this definition, complied with the provisions of this Act;
 
g)   enforcement of any of the Commissioner's remedies under this Act to ensure that any obligation imposed upon any person by or under this Act, is complied with; and
 
h)   performance of any other administrative function which is necessary for the carrying out of the provisions of
this Act;
 
"authorisation letter" means a written authorisation granted by the Commissioner, or any General Manager, South African Revenue Service under the control, direction or supervision of the Commissioner, to an officer to
inspect, audit, examine or obtain, as contemplated in section 578, any information, documents or things;
 
"documents" include any document, book, record, account, deed, plan, instrument, trade list, stock list, affidavit, certificate, photograph, map, drawing and any printout of information generated, sent, received, stored, displayed or processed by electronic means;
 
"information" includes any electronic representations of information in any form;
 
"judge" means a judge of the High Court and includes a judge in chambers;
 
"officer" means an officer contemplated in section 5(1);
 
"premises" include any building, premises, aircraft,

vehicle, vessel or place;
 
"things" include any corporeal or incorporeal thing and any document relating thereto;
 
"warrant" means a written authorisation issued by a judge to search for and seize any information, documents or things under section 570.
 
2)   For the purposes of sections 57A, 578, 57C and 570, where any information, documents or things are not in one of the official languages, the Commissioner or any officer may by notice in writing require the vendor or, on the vendor's default, any other person, to produce, within a reasonable period, a translation thereof in one of the official languages determined by the Commissioner or such
officer.
3)   Any translation referred to in subsection (2) shall be- a)   produced at such time and premises as may be
specified by the Commissioner or any officer; and
 
b)   prepared and certified by a sworn translator or another person approved by the Commissioner or such officer.
 
4)   For the purposes of sections 57C and 570, the Commissioner may delegate the powers vested in him by those sections, to any other officer.
 
57A. Furnishing of information, documents or things by any person
 
The Commissioner or any officer may, for the purposes of the administration of this Act in relation to any vendor, require such vendor or any other person to furnish such information
(whether orally or in writing), documents or things as the
Commissioner or such officer may require.

 
 
 
 

                        

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578. Obtaining of information, documents or things at certain premises
 
1)   The Commissioner, or an officer named in an authorisation letter, may, for the purposes of the administration of this Act in relation to any vendor, require such vendor or any other person with reasonable prior notice, to furnish, produce or make available any such information. documents or things as the Commissioner or such officer may require to inspect, audit, examine or obtain.
 
2)   For the purposes of the inspection, audit, examination or obtaining of any such information, documents or things,
the Commissioner or an officer contemplated in subsection
(1), may call on any person- a)   at any premises; and
b)   at any time during such person's normal business hours.
 
3)   For the purposes of subsection (2), the Commissioner or any officer contemplated in subsection (1), shall not enter any dwelling house or domestic premises (except any pan thereof as may be occupied or used for the purposes of trade) without the consent of the occupant.
 
4)   Any officer exercising any power under this section, shall on demand produce the authorisation letter issued to him.
 
57C. Inquiry
 
1)   The Commissioner or an officer contemplated in section
57(4) may authorise any person to conduct an inquiry for the purposes of the administration of this Act.
 
2)   Where the Commissioner, or any officer contemplated in section 57(4), authorises a person to conduct an inquiry, the Commissioner or such officer shall apply to a judge for an order designating a presiding officer before whom the

inquiry is to be held.
 
3)   A judge may, on application by the Commissioner or any officer contemplated in section 57(4), grant an order in terms of which a person contemplated in subsection (7) is designated to act as presiding officer at the inquiry contemplated in this section.
 
4)   An application under subsection (2) shall be supported by information supplied under oath or solemn declaration, establishing the facts on which the application is based.
 
5)   A judge may grant the order referred to in subsection (3) if he is satisfied that there are reasonable grounds to believe that-
 
a)
 
i)    there has been non-compliance by any person with his obligations in terms of this Act; or
 
ii)   an offence in terms of this Act has been committed by any person;
 
b)   information, documents or things are likely to be revealed which may afford proof of-
 
i)    such non-compliance; or
 
ii)   the committing of such offence; and
 
c)   the inquiry referred to in the application is likely to reveal such information, documents or things.
 
6)   An order under subsection (3) shall, inter a/ia- a)   name the presiding officer;
b)   refer to the alleged non-compliance or offence to be inquired into;
 
c)   identify the person alleged to have failed to comply

 
 
 
 

                        

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with the provisions of the Act or to have committed the offence; and
 
d)   be reasonably specific as to the ambit of the inquiry.
 
7)   Any presiding officer shall be a person appointed by the
Minister in terms of section 83A(4) of the Income Tax Act,
1962 (Act No. 58 of 1962).
 
8)   For the purposes of an inquiry contemplated in this section, a presiding officer designated under subsection (3) shall-
 
a)   determine the proceedings as he may think fit;
 
b)   have the same powers-
 
i)    to enforce the attendance of witnesses and to compel them to give evidence or to produce evidential material; and
 
ii)   relating to contempt committed during the proceedings,
 
as are vested in a President of the Special Court contemplated in section 83 of the Income Tax Act, and for those purposes section 84 and 85 of that Act shall apply mutatis mutandis; and
 
c)   record the proceedings and evidence at an inquiry in such manner as he may think fit.
 
9)   Any person may, by written notice issued by the presiding officer, be required to appear before him in order to be questioned under oath or solemn declaration for the purposes of an inquiry contemplated in this section.
 
10) The notice contemplated in subsection (9) shall specify the- a)   place where such inquiry will be conducted;
b)   date and time of such inquiry; and

c)   reasons for such inquiry.
 
11) Any person whose affairs are investigated in the course of an inquiry contemplated in this section, shall be entitled to be present at the inquiry during such time as his affairs are investigated, unless on application by the person contemplated in subsection (1), the presiding officer directs otherwise on the ground that the presence of the person and his representative, or either of them, would be prejudicial to the effective conduct of the inquiry.
 
12) Any person contemplated in subsection (9) has the right to have a legal representative present during the time that he appears before the presiding officer.
 
13) An inquiry contemplated in this section shall be private and confidential and the presiding officer shall at any time on application by the person whose affairs are investigated or any other person giving evidence or the person contemplated in subsection (1), exclude from such inquiry or require to withdraw therefrom, all or any persons whose attendance is not necessary for the inquiry.
 
14) Any person may, at the discretion of the presiding officer, be compensated for his reasonable expenditure related to the attendance of an inquiry, by way of witness fees in accordance with the tariffs prescribed in terms of section
51bis of the Magistrates' Courts Act, 1944 (Act No. 32 of
1944).
 
15) The provisions with regard to the preservation of secrecy contained in section 6 shall mutatis mutandis apply to any person present at the questioning of any person contemplated in subsection (9), including the person being questioned.
 
16) Subject to subsection (17), the evidence given under oath or solemn declaration at an inquiry may be used by the Commissioner in any subsequent proceedings to which the

 
 
 
 

                        

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17)

person whose affairs are investigated is a party or to which a person who had dealings with such person is a party.
 
 
a)   No person may refuse to answer any question during an inquiry on the grounds that it may incriminate him.
 
b)   No incriminating evidence so obtained shall be admissible in any criminal proceedings against the person giving such evidence, other than in proceedings where that person stands trial on a charge relating to the administering or taking of an oath or the administering or making of an affirmation or the giving of false evidence or the making of a false statement in connection with such questions and answers or a
failure to answer questions lawfully put to him, fully and satisfactorily.

officer of the same gender as the person being searched,
 
for any information, documents or things, that may afford evidence as to the non-compliance by any person with his obligations in terms of this Act;
b)   seize any such information, documents or things; and c)   in carrying out any such search, open or cause to be
opened or removed and opened, anything in which
such officer suspects any information, documents or things to be contained.
 
2)   An application under subsection (1) shall be supported by information supplied under oath or solemn declaration, establishing the facts on which the application is based.
 
3)   A judge may issue the warrant referred to in subsection (1)

18) An inquiry in terms of this section shall proceed notwithstanding the fact that any civil or criminal proceedings are pending or contemplated against or involving any person identified in subsection (6)(c) or any witness or potential witness or any person whose affairs may be investigated in the course of that inquiry.
 
57D. Search and seizure
 
1)   For the purposes of the administration of this Act, a judge may, on application by the Commissioner or any officer contemplated in section 57(4), issue a warrant, authorising the officer named therein to, without prior notice and at any time-
 
a)
 
i)    enter and search any premises; and
 
ii)   search any person present on the premises, provided that such search is conducted by an

if he is satisfied that there are reasonable grounds to believe that-
 
a)
 
i)    there has been non-compliance by any person with his obligations in terms of this Act; or
 
ii)   an offence in terms of this Act has been committed by any person;
 
b)   information, documents or things are likely to be found which may afford evidence of-
 
i)    such non-compliance; or
 
ii)   the committing of such offence; and
 
c)   the premises specified in the application are likely to contain such information, documents or things.
 
4)   A warrant issued under subsection (1) shall-

 
 
 
 

                        

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a)   refer to the alleged non-compliance or offence in relation to which it is issued;
 
b)   identify the premises to be searched;
 
c)   identify the person alleged to have failed to comply
with the provisions of the Act or to have committed the offence; and
 
d)   be reasonably specific as to any information, documents or things to be searched for and seized.
 
5)   Where the officer named in the warrant has reasonable grounds to believe that-
 
a)   such information, documents or things are-
 
i)    at any premises not identified in such warrant; and ii)   about to be removed or destroyed; and
b)   a warrant cannot be obtained timeously to prevent such removal or destruction,
 
such officer may search such premises and further exercise all the powers granted by this section, as if such premises had been identified in a warrant.
 
6)   Any officer who executes a warrant may seize, in addition to the information, documents or things referred to in the warrant, any other information, documents or things that such officer believes on reasonable grounds afford evidence of the non-compliance with the relevant obligations or the committing of an offence in terms of this Act.
 
7)  The officer exercising any power under this section shall on demand produce the relevant warrant (if any).
 
8)   The Commissioner, who shall take reasonable care to ensure that the information, documents or things are preserved, may retain them until the conclusion of any

investigation into the non-compliance or offence in relation to which the information, documents or things were seized or until they are required to be used for the purposes of any legal proceedings under this Act, whichever event occurs last.
 
9)
 
a)   Any person may apply to the relevant division of the High Court for the return of any information, documents or things seized under this section.
 
b)   The court hearing such application may, on good cause shown, make such order as it deems fit.
 
10) The person to whose affairs any information, documents or things seized under this section relate, may examine and make extracts therefrom and obtain one copy thereof at the expense of the State during normal business hours under such supervision as the Commissioner may determine.
 
58. Offences
 
Any person who-
 
a)   holds himself out as an officer engaged in carrying out the provisions of this Act; or
 
b)   holds himself out as an officer authorised by the Commissioner or a judge for the purposes of the obtaining of information, documents or things, an inquiry or entry and search as contemplated in section 578, 57C or 570, as the case may be; or
c)   fails to apply for registration as required by section 23; or d)   fails to comply with the provisions of section 14 or section
28(1) or (2), section 29 or section 30; or
 
e)   contravenes the provisions of section 65; or
 
f)    fails to comply with any of the requirements of the

 
 
 
 

                        

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provisions of section 55; or
g)   without just cause shown by him, refuses or neglects to- i)  famish, produce or make available any information,
documents or things;
 
ii)   reply to or answer truly and fully, any questions put to him; or
 
iii)  attend and give evidence,
 
as and when required in terms of this Act; or
 
h)   hinders or obstructs or assaults any officer engaged in carrying out his duties under section 578 or 570; or
 
i)    fails to notify the Commissioner of anything of which he is required by section 24(3), 25 or 48(7) to notify the Commissioner; or
 
j)    being an auctioneer or a supplier of goods or services-
 
i)    declares to any person to whom goods or services are supplied by such auctioneer or supplier that tax has been included in or will be added to the price or amount chargeable in respect of such supply, where in fact no tax is payable in terms of this Act; or
 
ii)   knowingly and without lawful excuse (the burden of proof of which shall be upon him) includes in or adds to the price or amount charged to the recipient in relation to such supply any tax, where in fact no tax is payable in terms of this Act; or
 
iii)  knowingly and without lawful excuse (the burden of proof of which shall be upon him) includes in or adds to the price or amount charged to the recipient in relation to such supply any tax in excess of the tax properly leviable under this Act in respect of the value of such supply; or

k)   knowingly and without lawful excuse (the burden of proof of which shall be upon him) fails to comply with the provisions of paragraph (i) of the proviso to section 20(1) or paragraph (A) of the proviso to section 21(3); or
 
l)    being a registered vendor, fails to provide a recipient with a tax invoice, credit note or debit note as required by this
Act; or
 
m)  being an agent or an auctioneer as contemplated in section
54, fails to comply with any of the requirements of section
54(3) or the proviso to section 54(5),
 
n)   issues a document purporting to be a tax invoice, or bearing the words 'tax invoice', if that document does not meet the requirements of section 20(4), (5) or (7), as the case may be; or
 
o)   without lawful cause fails to comply with a notice of appointment as agent in terms of section 47 within the period specified in such notice,
 
p)   uses an electronic or digital signature of any other person in any electronic communication to the Commissioner for any purpose, without the consent and authority of such person; and
 
q)   makes or causes or allows to be made any false statement or entry in any form rendered in terms of this Act, or signs any statement or form so rendered without reasonable grounds for believing the same to be true,
 
shall be guilty of an offence and liable on conviction to a fine or to imprisonment for a period not exceeding 24 months.
 
59. Offences and penalties in regard to tax evasion
 
1)   Any person who with intent to evade the payment of tax levied under this Act or to obtain any refund of tax under this Act to which such person is not entitled or with intent

 
 
 
 

                        

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to assist any other person to evade the payment of tax payable by such other person under this Act or to obtain any refund of tax under this Act to which such other person is not entitled-
 
a)   makes or causes or allows to be made any false statement or entry in any return rendered in terms of this Act, or signs any statement or return so rendered without reasonable grounds for believing the same to be true; or
 
b)   gives any false answer, whether verbally or in writing, to any request for information made under this Act by the Commissioner or any person duly authorized by the Commissioner or any officer referred to in section 5(1); or
 
c)   prepares or maintains or authorizes the preparation or maintenance of any false books of account or other records or authorizes the falsifications of any books of account or other records; or
 
d)   makes use of any fraud, art or contrivance whatsoever, or authorizes the use of such fraud, art or contrivance; or
 
e)   makes any false statement for the purposes of obtaining any refund of or exemption from tax; or
 
f)    receives, acquires possession of or deals with any goods or accepts the supply of any service, knowing or having reason to believe that the tax on the supply of the goods or services has been or will be evaded; or
 
g)   knowingly issues any tax invoice, credit note or debit note required under this Act which is in any material respect erroneous or incomplete; or
 
h)   knowingly issues any tax invoice showing an amount charged as tax where the supply in respect of which

the tax is charged will not take place; or
 
i)    for the purposes of section 16(2), fabricates, produces, furnishes or makes use of any tax invoice, debit note, credit note, bill of entry or other document contemplated in that section knowing the same to be false,
 
shall be guilty of an offence and liable on conviction to a fine or to imprisonment for a period not exceeding 60 months.
 
2)   Wherever in any proceedings under this section it is proved that any false statement or entry has been made in any return rendered under this Act by or on behalf of
any person or in any books of account or other records of any person, that person shall be presumed, until the contrary is proved, to have made that false statement or entry or to have caused that false statement or entry to
be made or to have allowed it to be made with intent to evade the payment of tax or to obtain a refund of tax to which that person is not entitled, as the case may be,
and any other person who made any such false statement or entry shall be presumed, until the contrary is proved,
to have made such false statement or entry with intent
to assist the first-mentioned person to evade the payment of tax or to obtain a refund of tax to which he is not entitled.
 
3)   A conviction for an offence in terms of this Act shall not exempt the person convicted from the payment of any tax, additional tax, penalty or interest payable in accordance with the provisions of this Act.
 
60. Additional tax in case of evasion
 
1)   Where any vendor or any person under the control or acting on behalf of the vendor fails to perform any duty imposed upon him by this Act or does or omits to do

 
 
 
 

                        

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anything, with intent-
 
a)   to evade the payment of any amount of tax payable by him; or
 
b)   to cause a refund to him by the Commissioner of any amount of tax (such amount being referred to hereunder as the excess) which is in excess of the amount properly refundable to him before applying section 44(6),
 
such vendor shall be chargeable with additional tax not exceeding an amount equal to double the amount of tax referred to in paragraph (a) or the excess referred to in paragraph (b), as the case may be.
 
2)   The amount of the said additional tax shall be assessed by the Commissioner and shall be paid by the vendor within such period as the Commissioner may allow.
 
3)   The power conferred upon the Commissioner by this section shall be in addition to any right conferred upon him by this Act to institute or take other proceedings under this Act.
 
61. Recovery of tax from recipient
 
1)   Where in respect of any supply made by a vendor the vendor has, in consequence of any fraudulent action or any misrepresentation by the recipient of the supply, incorrectly applied a rate of zero per cent or treated such supply as being exempt from tax, the Commissioner may, notwithstanding anything to the contrary contained in this Act, raise an assessment upon the recipient for the amount of tax payable, together with any penalty or interest that
has become payable in terms of section 39 in respect of such amount, and, in raising such assessment, the Commissioner may estimate the amount on which the tax is payable.

2)   The amounts payable under such assessment shall be paid by the recipient within such period as the Commissioner may allow and shall be recoverable from the recipient in the manner provided in section 40.
 
3)   This section shall not be construed as preventing the Commissioner from recovering the amounts of unpaid tax, penalty and interest from the vendor, but in the event of such amounts being recovered from the recipient the vendor shall be absolved from liability for the payment of the amounts due.
 
62. Publication of names of tax offenders
 
1)   Notwithstanding the provisions of section 6, the Commissioner may from time to time publish for general information such particulars as specified in subsection (2), relating to any offence committed by any person, where such person has been convicted of such offence in terms of-
 
a)   section 58 or 59(1);
 
b)   the common law, where the criminal conduct corresponds materially with an offence referred to in paragraph (a),
 
after any appeal or review proceedings in relation thereto have been completed or not been instituted within the period allowed therefore.
2)   Every publication in terms of this section may specify- a)   the name, address and principal enterprise of the
vendor;
 
b)   such particulars of the offence as the Commissioner may think fit;
 
c)   the tax period or tax periods in which the offence occurred;

 
 
 
 

                        

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d)   the amount or estimated amount of the tax evaded;
 
e)   the amount (if any) of the additional tax imposed and the particulars of the fine or sentence imposed.
 
3)   A copy of every notice published under this section shall be laid upon the Table in Parliament.
 
63. Reporting of unprofessional conduct
 
1)   For the purposes of this section "controlling body" means any professional association, body or board which has been established, whether voluntarily or by or under any law, for the purpose of exercising control over the carrying on of any profession, calling or occupation and which has
power to take disciplinary action against any person who in the carrying on of such profession, calling or occupation fails to comply with or contravenes any rules or code of conduct laid down by such association, body or board.
 
2)   Where any person who carries on any profession, calling or occupation in respect of which a controlling body has been established has, in relation to the affairs of any other
person (hereinafter referred to as a client), done or omitted to do anything which in the opinion of the Commissioner-
 
a)   was intended to enable or assist the client to avoid or unduly postpone the performance of any duty or obligation imposed on such client by or under this Act or to obtain any refund of tax under this Act to which such client is not entitled, or by reason of negligence on the part of such person resulted in the avoidance or undue postponement of the performance of any such duty or obligation or the obtaining of any such refund; and
 
b)   constitutes a contravention of any rule or code of conduct laid down by the controlling body which may result in disciplinary action being taken against such person by the body,

the Commissioner may lodge a complaint with the said controlling body.
 
3)
 
a)   Notwithstanding the provisions of section 6 of this Act the Commissioner may in lodging any complaint under subsection (2) disclose such information relating to the client's affairs as in the opinion of the Commissioner it is necessary to lay before the controlling body to which the complaint is made.
 
b)   Before lodging any such complaint or disclosing such information the Commissioner shall deliver or send to the client and the person against whom the complaint is to be made a written notification of his intended action setting forth particulars of the said information.
 
c)   The client or the said person may within 30 days after the date of such written notification lodge in writing with the Commissioner any objection he may have to the lodging of the said complaint.
 
d)   If on the expiry of the said period of 30 days no objection has been lodged as contemplated in paragraph (c) or, if an objection has been lodged and the Commissioner is not satisfied that the objection should be sustained, the Commissioner may thereupon lodge the complaint as contemplated in subsection (2).
 
4)   The complaint shall be considered by the controlling body to which it is made and may be dealt with by it in such manner as the controlling body in terms of its rules sees fit: Provided that any hearing of the matter shall not be public and may only be attended by persons whose attendance,
in the opinion of the controlling body, is necessary for the proper consideration of the complaint.
 
5)   The controlling body with which a complaint is lodged and its members shall at all times preserve and aid in

 
 
 
 

                        

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preserving secrecy in regard to such information as to the affairs of the client as may be conveyed to them by the Commissioner or as may otherwise come to their notice in the investigation of the Commissioner's complaint and shall not communicate such information to any person whatsoever other than the client concerned or the person against whom the complaint is lodged, unless the
disclosure of such information is ordered by a competent court of law.

x. Miscellaneous
 
64. Prices deemed to include tax
 
1)   Any price charged by any vendor in respect of any taxable supply of goods or services shall for the purposes of this Act be deemed to include any tax payable in terms of section 7(1)(a) in respect of such supply; whether or not the vendor has included tax in such price.
 
2)   The amount of any deposit payable to or refundable by a vendor in respect of a returnable container shall be deemed to include tax.
 
65. Prices advertised or quoted to include tax
 
Any price advertised or quoted by any vendor in respect of any taxable supply of goods or services shall include tax and the vendor shall in his advertisement or quotation' state that the price includes tax, unless the total amount of the tax chargeable under section 7(1)(a), the price excluding tax and the price inclusive of tax for the supply are advertised or
quoted by the vendor: Provided that-
 
i)    where the price inclusive of tax and the price excluding tax for a supply are advertised or quoted, both prices shall be advertised or quoted with equal prominence and impact;
 
ii)   price tickets on goods need not state that the prices include tax if this is stated by way of a notice prominently displayed at all entrances to the premises in which the enterprise is carried on and at all points in such premises where payments are effected;
 
iii)  the Commissioner may in the case of any vendor or class of vendors approve any other method of displaying prices of goods or services by such vendor or class of vendors during a period approved by the Commissioner which commences before and ends after the commencement

 
 
 
 

                        

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date or, where the rate of tax is increased or reduced, the date on which the increased or reduced rate of tax takes effect.
 
iv)  a vendor may not state or imply that any form of trade,
cash or any other form of discount or refund is in lieu of the tax chargeable in terms of section 7(1)(a).
 
66. Rounding-off of the tax
 
An amount of tax determinable under this Act must be calculated by-
 
a)   where the tax fraction is expressed as-
 
i)    a proportion, rounding it off to the fifth decimal place namely 0,12280; or
 
ii)   a percentage, rounding it off to the third decimal place, namely 12,280; and
 
b)   rounding franctions of-
 
i)    less than half a cent, down to the last cent; or ii)   half a cent or more, up to the next cent.
67. Contract price or consideration may be varied according to rate of value-added tax
 
1)   Whenever the value-added tax is imposed or increased in respect of any supply of goods or services in relation to which any agreement was entered into by the acceptance of an offer made before the tax was imposed or increased, as the case may be, the vendor may, unless agreed to the contrary in any agreement in writing and notwithstanding anything to the contrary contained in any law, recover from
the recipient, as an addition to the amounts pay able by the recipient to the vendor, a sum equal to any amount payable by the vendor by way of the said tax or increase, as the case may be, and any amount so recoverable by the

vendor shall, whether it is recovered or not, be accounted for by the vendor under the provisions of this Act as part of the consideration in respect of the said supply.
 
2)   Whenever the value-added tax is withdrawn or decreased in respect of any supply of goods or services in relation to which any agreement was entered into by the acceptance of an offer made before the tax was withdrawn or decreased, as the case may be, the vendor shall, unless agreed to the contrary in any agreement in writing and notwithstanding anything to the contrary contained in any law, reduce the amount payable to him by the recipient by way of any consideration in which the amount of such tax was included, by a sum equal to the amount of the tax withdrawn or the amount by which the tax was decreased, as the case may be.
 
3)   Whenever the value-added tax is imposed or increased, or withdrawn or decreased, as the case may be, in respect of any supply of goods or services subject to any fee, charge or other amount (whether it is a fixed, maximum or minimum fee, charge or other amount) prescribed by, or determined pursuant to, any Act or by any regulation or measure having the force of law, that fee, charge or other amount may be increased or shall be decreased, as the case may be, by the amount of tax or additional tax charged or chargeable or the amount of tax no longer charged or chargeable, as the case may be: Provided that this subsection shall not apply to any fee, charge or other amount if such fee, charge or other amount has been altered in any Act, regulation or measure prescribing or determining such fee, charge or other amount to take account of any imposition, increase, decrease or withdrawal of such tax: Provided further that this subsection shall not be construed so as to permit any further increase or require a further decrease, as the case may be, in a fee, charge or other amount referred to in this

 
 
 
 

                        

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subsection, where such fee, charge or other amount is calculated as a percentage or fraction of another amount which represents the consideration in money for a taxable supply of goods or services, other than a taxable supply charged with tax at the rate or zero per cent or a supply which is an exempt supply.
 
erA. Application of increased or reduced tax rate
 
1)   Subject to the provisions of subsection (3), where-
 
a)   goods are provided before the date on which an increase or decrease in the rare of tax leviable under section 7(1)(a) becomes effective in respect of the supply of such goods or the date on which the tax is imposed or withdrawn in respect of the supply of such goods; or
 
b)   goods are provided in respect of a supply contemplated in section 9(3)(a) or (b) during a period beginning before and ending before, on or after the said date; or
 
c)   services are performed during a period beginning
before and ending before, on or after the date on which an increase or decrease in the rate of tax leviable under section 7(1)(a) becomes effective in respect of the supply of such services or the date on which the tax is imposed or withdrawn in respect of the supply of such services,
 
and the supply of such goods or services, as the case may be, is in terms of section 9 deemed to be made on or after the said date, then-
 
i)    in the case of the increase or decrease in the rate of the tax on the said date, the tax payable in respect of the supply of the goods referred to in paragraph (a) or the supply of the goods referred to in paragraph (b) which are provided during a period referred to in that

paragraph which expires before the said date or the supply of services referred to in paragraph(c) which are performed during a period referred to in that paragraph which expires before the said date, shall be determined at the rate applicable on the day before the said date
or, in the case of the imposition of the tax on the said date, any such supply of goods or services, as the case may be, shall be deemed not to be subject to such tax or, in the case of the withdrawal of the tax on
the said date, any such supply of goods or services, as the case may be, shall be deemed to be subject to
such tax as if such tax had not been withdrawn; and
 
ii)   where the period referred to in paragraph (b) or the period referred to in paragraph (c) expires on or after the said date, the value of the supply in respect of the period in question shall, on the basis of a fair and reasonable apportionment be deemed to consist of a part hereinafter referred to as the first part) relating to the provision of the goods or the performance of the services, as the case may be, before the said date and a part (hereinafter referred to as the second part) relating to the provision of the goods or the performance of the services, as the case may be, on or after the said date, and, in the case of the increase or decrease in the rate of the tax on the said date, the tax payable in respect of each part shall be separately determined, the tax in respect of the first part being determined at the rate applicable on the day before the said date and the tax in respect of the second part at the rate applicable on the said date or, in the case of the imposition of the tax on the said date, the first part shall be deemed not to be subject to such tax or, in the case of the withdrawal of the tax on the said date, the first part shall be deemed to be subject to such tax as
if such tax had not been withdrawn:

 
 
 
 

                        

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Provided that this subsection shall not apply in respect of any sale of fixed property.
 
2)   Subject to the provisions of subsection (3), where goods or services would in terms of section 9 be deemed to be supplied at a time within the period commencing on the date of the announcement of an increase in the rate of tax leviable in terms of section 7(1)(a) and ending on the day before the date on which the increase in the rate of tax becomes effective, that supply shall, to the extent to which it consists of the provision of goods on or after the day following the last day of the period of 21 days after the
date on which the increase of the rate becomes effective, or the performance of services on or after the date on which the increase of the rate becomes effective, be deemed not to take place at the said time, but on the date on which the increase in the rate becomes effective: Provided that this subsection shall not apply where the supply takes place-
 
i)    in consequence of any payments customarily made or becoming due or invoices customarily issued, when made, becoming due or issued at regular intervals for the provision of goods or the performance of services still to be provided or performed; or
 
ii)   under any written agreement referred to in subsection
(4).
 
3)   For the purposes of subsections (1) and (2) goods shall be deemed to be provided by the supplier thereof when such goods are delivered to the recipient and goods supplied under a rental agreement shall be deemed to be provided to the recipient when he takes possession or occupation thereof: Provided that where goods consist of fixed property supplied by way of a sale and transfer thereof is effected by registration in a deeds registry, that property shall for the purposes of this subsection be deemed to be

delivered to the recipient when such registration is effected.
 
4)   Subject to the provisions of section 78(9), where, before the date on which an increase in the rate of tax leviable in
terms of section 7(1)(a) becomes effective, a written agreement is concluded for-
 
a)   the sale of fixed property consisting of any dwelling together with land on which it is erected, or of any real right conferring a right of occupation of a dwelling or of any unit as defined in section 1 of the Sectional Titles Act, 1986 (Act No. 95 of 1986), such unit being a dwelling, or of any share in a share block company which confers a right to or an interest in the use of a dwelling;
 
b)   the sale of fixed property consisting of land, or of any real right conferring a right of occupation of land for the sole or principal purpose of the erection by or for the purchaser of a dwelling or dwellings on the land, as confirmed by the purchaser in writing; or
 
c)   the construction by any vendor carrying on a construction enterprise of any new dwelling,
 
and-
 
i)    the price in respect of the sale or construction in question was determined and stated in the said agreement, as in force before the said date, and that agreement was signed by the parties thereto before the said date; and
 
ii)   the supply of such fixed property or services under the said agreement is in terms of section 9 deemed to take place on or after the said date,
 
the rate at which tax is in terms of the said section 7(1)(a)
leviable in respect of that supply, shall be the rate at which

 
 
 
 

                        

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tax would have been levied had the supply taken place on the date on which such agreement was concluded.
 
5)   Where-
 
a)   goods are sold in terms of a lay-by agreement as contemplated in section 8(4)(a); or
 
b)   a service is supplied in relation to the said agreement as contemplated in section 8(4)(b),
 
and such agreement is concluded before the date on which an increase of the rate of tax leviable in terms of section
7(1)(a) becomes effective and the deposit referred to in the said section 8(4)(a) was paid before that date, the rate at which tax is in terms of the said section 7(1)(a) leviable in respect of that supply, shall be the rate at which tax would have been levied had the supply taken place on the date on which such agreement was concluded.
 
67B. Registration of Motor Vehicles prohibited in certain circumstances
 
Any motor vehicle registering authority in the Republic shall not register any imported motor vehicle unless the person applying for registration produces to such registering authority-
 
a)   in the case of a motor vehicle which is imported into the Republic and is not required to be entered in terms of the Customs and Excise Act, a document, receipt or certificate showing that any tax which may be payable in terms of this Act has been paid in respect of such importation into the Republic; or
 
b)   in the case of a motor vehicle which is imported into the Republic and is required to be entered in terms of the Customs and Excise Act, a customs document showing that any tax which may be payable under this Act has been paid in respect of such importation into the Republic; or

c)   an exemption certificate issued by the Commissioner to the effect that no tax is payable in terms of this Act in respect
of the importation of the motor vehicle.
 
68. Tax relief allowable to certain diplomats and diplomatic and consular missions
 
1)   The Minister may, with the concurrence of the Minister of Foreign Affairs, authorize the granting of relief, by way of a refund, in respect of value-added tax paid or borne-
 
a)   by any person enjoying full or limited immunity, rights or privileges under sections 3, 4, 5 and 6 of the Diplomatic Immunities and Privileges Act, 2001 (Act
No. 37 of 2001), or under an agreement or otherwise as contemplated in section 7 of that Act or under the recognized principles of international law; or
 
b)   by any diplomatic or consular mission of a foreign country established in the Republic, relating to transactions concluded for the official purposes of such mission.
 
2)   The relief contemplated in subsection (1)(a) shall not be granted to any South African citizen or permanent resident of the Republic.
 
3)   The Minister may authorize any relief under this section on such conditions and subject to such restrictions as he may deem fit.
 
4)   Any claim for a refund of tax under this section shall be made in such form and at such time as the Commissioner may prescribe and shall be accompanied by such proof of payment of tax or certification as the Commissioner may require.
 
70. Jurisdiction of courts
 
A person charged with an offence under this Act may be tried

 
 
 
 

                        

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in respect of that offence by any court having jurisdiction within any area in which that person resides or carries on business, in addition to any jurisdiction conferred upon any court by any
law.
 
71. Authentication and service of documents
 
1)   Any form, notice, demand or other document issued or given or made by or on behalf of the Commissioner or any other officer in terms of this Act shall be sufficiently authenticated if the name or official designation of the Commissioner or officer by whom the same is issued or given or made is stamped or printed thereon.
 
2)   Any form, notice, demand, document or other communication required or authorized under this Act to be issued, given or sent to or served upon any person by the Commissioner or any other officer in terms of this Act shall, except where otherwise provided in this Act, be deemed to have been effectually issued, given, sent or served-
 
a)   if delivered to him; or
 
b)   if left with some adult person apparently residing at or occupying or employed at his last known abode or office or place of business in the Republic; or
 
c)   if dispatched by registered or any other kind of post addressed to him at his last known address, which may be any such place or office as is referred to in
paragraph (b) or his last known post office box number or that of his employer; and
 
d)   in the case of a company-
 
i)    if delivered to the public officer of the company contemplated in section 101 of the Income Tax Act; or
 
ii)   if left with some adult person apparently residing at

or occupying or employed at the place appointed by the company as its registered office in the Republic or where no such place has been appointed by the company, if left with some adult person apparently residing at or occupying or employed at the last known office or place of business of the company in the Republic; or
 
iii)  if dispatched by registered or any other kind of
post addressed to the company or its public officer at its or his last known address, which may be any such office or place as is referred to in subparagraph (ii) or its or his last known post office box number or that of his employer.
 
3)   Any form, notice, demand, document or other communication referred to In subsection (2) which has been issued, given, sent or served in the manner contemplated in paragraph (c) or (d)(iii) of that subsection shall be deemed to have been received by the person to whom it was addressed at the time when it would, in the ordinary course of post, have arrived at the place to which
it was addressed, unless the Commissioner is satisfied that it was not so received or was received at some other time or, where the time at which it was received or the fact that it was received is in dispute in proceedings under this Act in any court having jurisdiction to decide the matter, the court is so satisfied: Provided that the proceeding provisions of this subsection shall not apply where any person is in criminal proceedings charged with the commission of an offence under this Act by reason of his failure, refusal or neglect to do anything which he is required to do in terms
of the said form, notice, demand, document or other communication, unless it was dispatched to such person by registered or certified post.
 
4)   If the Commissioner is satisfied that any form, notice, demand, document or other communication (other than a

 
 
 
 

                        

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notice of assessment) issued, given sent or served in a manner contemplated in subsection (2)(b), (c) or (d)(ii) or (iii), has not been received by the person to whom it was addressed or has been received by such person considerably later than it should have been received by him and that such person has in consequence been placed at a disadvantage, the Commissioner may, if he is satisfied that the circumstances warrant such action, direct that such form, notice, demand, document or other communication
be withdrawn and be issued, given, sent or served anew.
 
72. Arrangements and directions to overcome difficulties, anomalies or incongruities
 
lf in any case the Commissioner is satisfied that in consequence of the manner in which any vendor or class of vendors conducts his or their business, trade or occupation, difficulties, anomalies or incongruities have arisen or may arise in regard to the application of any of the provisions of this Act, the Commissioner may make an arrangement or give a direction as to-
 
a)   the manner in which such provisions shall be applied; or
 
b)   the calculation or payment of tax or the application of any rate of zero per cent or any exemption from tax provided in this Act,
 
in the case of such vendor or class of vendors or any person transacting with such vendor or class of vendors as appears to overcome such difficulties, anomalies or incongruity: Provided that such direction or arrangement shall not have the effect of substantially reducing or increasing the ultimate liability for tax levied under this Act.
 
73. Schemes for obtaining undue tax benefits
 
1)   Notwithstanding anything in this Act, whenever the Commissioner is satisfied that any scheme (whether entered into or carried out before or after the

commencement of this Act, and including a scheme involving the alienation of property)-
 
a)   has been entered into or carried out which has the effect of granting a tax benefit to any person; and
 
b)   having regard to the substance of the scheme-
 
i)    was entered into or carried out by means or in a manner which would not normally be employed for bona fide business purposes, other than the obtaining of a tax benefit; or
 
ii)   has created rights or obligations which would not normally be created between persons dealing at arm's length; and
 
c)   was entered into or carried out solely or mainly for the purpose of obtaining a tax benefit,
 
the Commissioner shall determine the liability for any tax imposed by this Act, and the amount thereof, as if the scheme had not been entered into or carried out, or in such manner as in the circumstances of the case he deems appropriate for the prevention or diminution of such tax benefit.
 
2)   For the purposes of this section-
 
"scheme" includes any transaction, operation, scheme or understanding (whether enforceable or not), including all steps and transactions by which it is carried into effect;
 
"tax benefit" includes-
a)   any reduction in the liability of any person to pay tax; or b)   any increase in the entitlement of any vendor to a
refund of tax; or
 
c)   any reduction in the consideration payable by any person in respect of any supply of goods or services;

 
 
 
 

                        

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or
 
d)   any other avoidance or postponement of liability for the payment of any tax, duty or levy imposed by this Act or by any other law administered by the Commissioner.
 
3)   Any decision of the Commissioner under this section shah be subject to objection and appeal, and whenever in proceedings relating thereto it is proved that the scheme concerned does or would result in a tax benefit, it shall be presumed, until the contrary is proved that such scheme was entered into or carried out solely or mainly for the purpose of obtaining a tax benefit.
 
74. Schedules and Regulations
 
1)   The Minister may make regulations in regard to any matter which is permitted or required by this Act and generally for the better carrying out of the objects and purposes of this Act.
 
2)   Notwithstanding anything to the contrary in this Act, where the Minister is satisfied that in consequence of the manner in which any business, trade or occupation is carried on malpractices or difficulties have arisen or may arise in regard to the collection of tax levied under this Act, the Minister may, in order to counter such malpractices or to overcome such difficulties, make regulations in regard to the application of any rate of zero per cent or any exemption or to the payment or collection of any tax in a manner other than that provided in this Act.
 
3)
 
a)   Whenever the Minister amends any Schedule under
any provision of the Customs and Excise Act, 1964 (Act No. 91 of 1964), by notice in the Gazette and it is necessary to amend in consequence thereof Schedule
1 of this Act, the Minister may by like notice amend the said Schedule 1.

b)   The provisions of section 48(6) of the Customs and Excise Act, 1964, shall apply mutatis mutandis in respect of any amendment by the Minister under this subsection.
 
75. Tax agreements
 
1)   The National Executive may enter into an agreement with the government of any other country whereby arrangements are made with that government with a view to-
 
a)   the prevention, mitigation or discontinuance of the levying, under the laws of the Republic and such other country, of value-added tax or any similar tax where the supply of goods or services is subject to such tax in either the Republic or such other country and such supply or the importation of such goods or services is also subject to such tax in the other country which is a party to the agreement;
 
b)   the refunding of value-added tax or any similar tax, or any portion of such value-added tax or similar tax, levied under the laws of the Republic and such other country, in respect of the supply of goods or services in the Republic or such other country, as the case may
be, where such goods or services are imported into such other country or the Republic, as the case may be;
 
c)   regulating or coordinating any matter with regard to the levying and collection, under the laws of the Republic and such other country, of value-added tax or any similar tax; or
 
d)   the rendering of reciprocal assistance in the administration of and the collection of value-added tax or any similar tax under the laws of the Republic and such other country, or in respect of the execution of the

 
 
 
 

                        

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arrangements provided for in any agreement entered into in terms of this section.
 
2)   As soon as may be possible after the approval by Parliament of any such agreement, as contemplated in section 231 of the Constitution, the arrangements thereby made shall be notified by publication in the Gazette and thereupon the arrangements so notified shall have effect as if enacted by this Act.
 
3)   Deleted by section 52 of Act 27 of 1997
 
4)   Deleted by section 52 of Act 27 of 1997
 
5)   The duty imposed by this Act to preserve secrecy with regard to such tax shall not prevent the disclosure to any authorized officer of the country contemplated in subsection (1) of any information necessary for the proper execution of the agreement notified in terms of subsection (2).
 
77. Notice of variation of rate of tax
 
1)   The Minister may by notice in the Gazette make known for general information-
 
a)   that in terms of a taxation proposal tabled by him in Parliament, the rate of tax specified in section 7 is to be increased to a rate set forth in that proposal and in that notice; or
 
b)   that it is proposed to decrease the rate of tax so mentioned to a rate set forth in that notice,
 
and the increased or decreased rate of tax so set forth shall, until an Act of Parliament is promulgated within six calendar months after the publication of the notice in the Gazette. by which effect is given to the proposal or other provision is made, apply for the purpose of determining amounts of tax in respect of supplies of goods and

services made by vendors on any date falling on or after the date which the Minister has specified in the said notice for the coming into operation of such increased or decreased rate of tax, as the case may be, or in respect of importations of goods made on such date.
 
2)   When in any legal proceedings the question arises whether the Minister has tabled a taxation proposal referred to in subsection (1), or as to the particulars contained in that proposal, a copy of a document purporting to be printed by order of the Speaker of Parliament and to contain such proposal, shall be accepted as sufficient evidence that
such proposal was tabled and of the particulars contained therein.
 
78. Transitional matters
 
1)   For the purposes of this section-
 
"sales tax" means the sales tax levied under the Sales Tax
Act;
 
"Sales Tax Act" means the Sales Tax Act, 1978 (Act No.
103 of 1978), as in force immediately prior to its repeal by this Act.
 
2)
 
a)   Where in the course of an enterprise carried on by a person registered as a vendor in terms of the Sales Tax Act that person has before the commencement date entered into an agreement for the sale of movable goods and sales tax would have been payable by him in respect of the taxable value of such sale if the said Act had not been repealed but the said tax is not payable by reason of the fact that the consideration payable by the purchaser in respect of such sale has not been paid in full before the commencement dare and delivery of the said goods has not been effected before that date, the said person shall, if on the

 
 
 
 

                        

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commencement date he is a vendor as defined in section 1 of this Act, be deemed for the purposes of this Act to have supplied the said goods at the time of delivery of the said goods or the time at which any payment in respect of the said consideration is made on or after the commencement date or the time at which an invoice in respect of such sale is issued on or after that date, whichever time is earliest.
 
b)   Where any leased property has been leased by a vendor under the Sales Tax Act who is on the commencement date a vendor under this Act, to a lessee under a financial lease, as defined in section 1 of the Sales Tax Act, and such property is delivered to the lessee on or after that date, such property shall, notwithstanding the provisions of section 9 of this Act, be deemed for the purposes of this Act to have been supplied to the lessee under an instalment credit agreement at the time of delivery of such property.
 
3)   where, on or after the commencement date, any amount accrues to a vendor who was a vendor for the purposes of the Sales Tax Act and the amount so accruing, or a portion thereof, would, but for the repeal of that Act, have been taken into account in the determination of a taxable value chargeable with sales tax-
 
a)   in terms of section 5(1)(c) of that Act in respect of a rental consideration for a period which ended before the said date; or
 
b)   in terms of section 5(1)(d) of that Act in respect of a taxable service completed before that date; or
 
c)   in terms of section 5(1)(e) of that Act in respect of board and lodging supplied for a period which ended before that date; or
 
d)   in terms of section 5(1)(f) of that Act in respect of

accommodation let for a period which ended before that date,
 
value-added tax shall, notwithstanding anything in this Act to the contrary, be chargeable under this Act in respect of that amount as though such amount were consideration for a supply of goods or services supplied by the vendor on
the date on which that amount accrued.
 
3A) This Act shall not be construed as imposing value-added tax under section 7(1)(a) in respect of-
 
a)   a provision of goods under a rental agreement entered into before the commencement date for a period which ended before that date where such goods did not constitute goods as defined in section 1 of the Sales Tax Act; or
 
b)   a performance of services under an agreement entered into before that date where the performance of such services is completed before that date or such services were performed during and in respect of a period which ended before that date, if in either case such services were not taxable services as contemplated in the definition of "taxable service" in section 1 of the Sales Tax Act.
 
4)   Where the value of any supply of goods or services, as determined under section 10, includes any amount which has been taken into account by a vendor in the determination of a taxable value under the Sales Tax Act, and sales tax was chargeable in respect of such taxable value under section 5 of that Act or would have been so chargeable but for the provisions of section 6 of that Act, the value in respect of such supply shall for the purposes
of the value-added tax be reduced by the said amount (but excluding so much of that amount as represents sales
tax).

 
 
 
 

                        

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5)   For the purposes of this Act, where-
 
a)   goods are provided under a rental agreement for a period which commences before and ends on or after the commencement date; or
 
b)   the performance of any services is commenced before and is completed on or after that date; or
 
c)   domestic goods and services are provided for a period which commences before and ends on or after that date,
 
the value of the supply, as determined under this Act, shall not be reduced to take account of any portion thereof made before the said date: Provided that-
 
i)    where the goods referred to in paragraph (a) consist of fixed property , there shall be excluded from the rental consideration of the supply so much of such consideration as is attributable to the portion of the period referred to in that paragraph which ends before the said date;
 
ii)   where the services referred to in paragraph (b) were not taxable services for the purposes of the Sales Tax Act-
 
aa) any progress payment in respect of that portion of the services performed before the said date shall for the purposes of this Act be ignored; and
 
bb) where any payment becomes due or is received in respect of services which were not taxable services for the purposes of the Sales Tax Act and which are commenced before and completed on or after the said date, that portion of the payment which, on
the basis of a fair and reasonable apportionment, is attributable to the portion of the services
performed before the said date shall be excluded from the consideration for the supply.

6)   Where any payment is made or an invoice is issued on or after the date of promulgation of this Act and before the commencement date in respect of consideration for the supply of any goods or services (not being a transaction in respect of which a taxable value is subject to sales tax), a supply of such goods or services shall be deemed to have been made on the commencement date to the extent to which such payment or invoice relates to the provision of goods or the performance of services on or after the commencement date: Provided that this subsection shall not apply in respect of any payments customarily made or invoices customarily issued, when made or issued at regular intervals for the provision of goods or performance of services still to be provided or performed.
 
7)
 
a)   In the case of a vendor who was on the day before the commencement date a vendor for the purposes of the Sales Tax Act an adjustment shall be made in the manner provided in paragraphs (c) and (d) in respect of sales tax attributable to any amount which would, but for the repeal of that Act, have been accounted for under paragraph (d), (i), (iv) or (vi) of subsection (2) of section 11 of that Act.
 
b)   The sales tax attributable to such amount shall be determined by applying the formula
 
     r       x t
100 + r
 
in which formula "r" is the rate of sales tax, expressed as a percentage, which was in force on the day before the commencement date and "t" is the said amount.
 
c)   The adjustment shall be made in the tax period of the vendor under this Act which, as nearly as possible,

 
 
 
 

                        

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corresponds with the tax period of the vendor which would. but for the repeal of the Sales Tax Act, have applied under that Act.
 
d)   The adjustment shall be made by including in the amounts of output tax accounted for under section
16(3) of this Act in respect of the relevant tax period under this Act the amount of sales tax attributable to the amount that would have been accounted for under paragraph (d) of subsection (2) of section 11 of the Sales Tax Act and by including in the amounts of input tax accounted for under the said section 16(3) such amount as would have been accounted for under paragraph (i), (iv) or (vi) of the said subsection (2).
 
8)   Where, in the case of a vendor who was for the purposes
of the Sales Tax Act a liquor trader as defined in paragraph
1 of the Schedule to Government Notice No. 339 published in Government Gazette No. 10615 on 20 February 1987, an amount of an excess referred to in paragraph 4(2) of that Schedule could, but for the repeal of the Sales Tax Act, have been carried forward from the tax period under that Act ending on the day before the commencement date,
that amount shall, if on that date he continued to carry on the trade of selling liquor, for the purposes of section 16(3) of this Act be deemed to be input tax paid by him in respect of a supply of liquor made to him on that date.
 
9)
 
a)   Notwithstanding the provisions of subsection (6), where fixed property has been disposed of under an agreement for the sale of such property concluded before the commencement date, the disposal of such property under such sale shall be deemed not to be a supply of goods for the purposes of this Act: Provided that where an agreement for the construction of improvements on such property has been concluded

before the said date and the consideration payable under such agreement is in terms of section 6(1)(c) of the Transfer Duty Act, 1949 (Act No. 40 of 1949), required for the purpose of the payment of transfer duty to be added to the consideration payable in respect of the acquisition of such property, such agreement and the agreement for the sale of the property shall for the purposes of this paragraph be deemed to be one agreement for the sale of the property.
 
aA) Where an agreement for the sale of fixed property consisting of any dwelling together with land on which it is erected, or of any real right conferring a right of occupation of a dwelling or of any unit as defined in section 1 of the Sectional Titles Act, 1986 (Act No. 95 of 1986), such unit being a dwelling, or of any share in a share block company which confers a right to or an interest in the use of a dwelling, was concluded on or before 31 March 1992 by a vendor who at the time of such sale holds such fixed property as trading stock, such sale shall, if the dwelling concerned was completed within 12 months before the
commencement date, be deemed not to be a supply of goods for the purposes of this Act.
 
aB) Where an agreement (other than an agreement referred to in paragraph (aC) for the sale of fixed property consisting of land, or of any real right conferring a right of occupation of land, was concluded on or after the commencement date and on or before 31 March 1992 for the sole or principal purpose of the erection by or
for the purchaser of a dwelling or dwellings on the land, as confirmed by the purchaser in writing, the tax chargeable under section 7(1)(a) in respect of the
supply of the land or real right under such sale shall be reduced to an amount equal to 6 per cent of the value

 
 
 
 

                        

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of the supply.
 
aC) Where fixed property includes a dwelling, and-
 
i)    the erection of the dwelling was completed on or after 30 September 1991 and on or before 31
December 1991 and an agreement for the sale of such fixed property was concluded on or after 22
August 1991 and on or before 31 December 1991, the tax chargeable under section 7(1)(a) in respect of the supply of the fixed property under such sale shall be reduced to an amount equal to 3 per cent of the value of the supply; or
 
ii)   the erection of the dwelling was completed on or after 30 September 1991 and on or before 31
March 1992 and an agreement for the sale of such fixed property was concluded on or after 22 August
1991 and on or before 31 March 1992, the tax chargeable under section 7(1)(a) in respect of the supply of the fixed property under such sale shall, subject to the provisions of subparagraph (i), be reduced to an amount equal to 6 per cent of the value of the supply:
 
Provided that-
 
i)    where an agreement has been concluded for the erection of a dwelling on land supplied under a sale and the consideration payable under such agreement would in terms of section 6(1)(c) of the Transfer Duty Act, 1949, if that Act were applicable, be required for the purpose of the payment of transfer duty to be added to the consideration payable in respect of the acquisition of the property, such agreement and the sale shall, subject to the provisions of paragraph (ii) of this proviso, for the purposes of this paragraph be deemed to

be one agreement for the sale of the property;
 
ii)   the tax payable in respect of the supply of the land and the supply of the construction services in respect of the erection of a dwelling as contemplated in paragraph (i), shall be separately payable in respect of each supply in accordance with the provisions of this Act;
 
iii)  where the agreement for the sale of such fixed property was concluded before the commencement date, the provisions of paragraph (a) of this subsection shall apply unless the seller and the purchaser under the sale agree in writing that that paragraph shall not apply and that this paragraph shall apply.
 
aD) Where any agreement (other than an agreement referred to in paragraph (i) of the proviso to paragraph (aC)) for the construction by any vendor carrying on a construction enterprise of any new dwelling was concluded on or before 31 March 1992 and the dwelling was to be erected in the course of such enterprise, the tax chargeable under section 7(1)(a) in respect of the supply of the construction service, including any construction service supplied to the
vendor by a subcontractor, shall to the extent that such services were performed on or before 31 March 1992 be reduced to 6 per cent of the value of the supply.
 
b)   For the purposes of this subsection where an option to purchase fixed property or a right of pre-emption in respect of Fixed property is granted, the agreement for the sale of the property shall be deemed to be concluded when the option or right of pre-emption is exercised.
 
10) Where any vendor who is on or with effect from the commencement date registered under section 23 and on

 
 
 
 

                        

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that date-
 
a)   carries on a construction, civil engineering or similar enterprise and has on hand a stock of materials acquired by him prior to that date in order to be used by him for the purpose of incorporation in any building or other structure or work of a permanent nature to be erected, constructed, assembled, installed, extended
or embellished by him in the course of such enterprise, and sales tax has been borne by him in respect of such materials; or
 
b)   has on hand a stock of consumable goods or maintenance spares acquired under sales concluded by him or the importation by him prior to that date for the purpose of consumption or use in the course of his enterprise, and sales tax has been borne by him in respect of such sales or importation.
 
and on or after that date any item of such stock is withdrawn by him for the purpose referred to in paragraph (a) or the purpose referred to in paragraph (b), as the case may be, the vendor may, provided he has taken stock of such materials, consumable goods or maintenance spares, as the case may be, and he retains properly prepared stock lists in respect of such stocktaking, include in the amounts of input tax deducted by him under section 16(3) in respect of the tax period during which such item is withdrawn, the amount of sales tax borne by him in respect of that item: Provided that where the vendor does not maintain records which are adequate enough to determine when items are withdrawn from such stocks or the sales tax so borne thereon in respect of sales to him of such items, the Commissioner may, on application by the vendor, authorize him to deduct the actual sales tax borne by him in respect of such sales or an amount of sales tax which on the basis of a reasonable calculation represents the amount of sales tax so borne by him on the stocks in equal instalments by

way of inclusions in the input tax deducted by the vendor
in his tax returns over a period of two years or such shorter period as the Commissioner may allow.
 
1OA) Where sales tax has been borne by any vendor (being a person who is on or with effect from the commencement date registered under section 23) in respect of the acquisition of goods (other than fixed property or goods incorporated therein) under a sale or the importation of goods and such goods are held by him on the commencement date as trading stock as defined in section
1 of the Income Tax Act, whether or not the vendor is liable for normal tax under that Act, the vendor may, provided he has taken stock of such goods and he retains properly prepared stock lists in respect of such stocktaking, include the amount of that tax in the amount of input tax deducted by him under section 16(3) in respect of the tax period during which such goods are supplied by him in the course or furtherance of his enterprise: Provided that where it appears to the Commissioner that the keeping of records for the purposes of the preceding provisions of this subsection can be dispensed with without prejudice to revenue collections, the Commissioner may, on application by the vendor, authorize him to deduct the sales tax on stocks of such goods so held by the vendor in equal instalments by way of inclusions in the input tax deducted by the vendor in his tax returns over a period of two years or such shorter period as the Commissioner may allow.
 
11)
 
a)   Where any person-
 
i)    is on the day before the commencement date registered as a vendor under the Sales Tax Act;
 
ii)   at the end of that day has in his possession goods (as defined in that Act) which he has not disposed of or which he has disposed of under a sale but for

 
 
 
 

                        

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which he has not received full payment and in either case sales tax was not borne by him on acquisition; and
 
iii)  on the commencement date is not a vendor for the purposes of this Act, he shall for the purposes of the Sales Tax Act be deemed to have applied such goods on the day referred to in subparagraph (i) to a use or consumption contemplated in section
5(1)(h) of that Act.
 
b)   Any sales tax payable under the Sales Tax Act in respect of the taxable value of such goods shall be payable at the rate of 10 percent and may be paid to the Commissioner within the period of three months reckoned from the day after the commencement date, without penalty.
 
78A. Transitional matters : Turnover Tax
 
1)   For the purposes of this section-
 
'taxable turnover' has the meaning assigned thereto in the
Sixth Schedule to the Income Tax Act;
 
'turnover tax' means the turnover tax payable by a registered micro business in terms of section 48A of the Income Tax Act; and
 
'registered micro business' has the meaning assigned thereto in the Sixth Schedule to the Income Tax Act.
 
2)   Where a person is deregistered in terms of the Sixth Schedule to the Income Tax Act and registers as a vendor, any supplies of goods or services-
 
a)   made by that person before it became a vendor;
 
b)   in respect of which the time of supply would have been deemed to have taken place while that person was a registered micro business had it been registered as a

vendor during that time;
 
c)   which were not included in the taxable turnover of that person while it was a registered micro business; and
 
d)   the receipts for which are received after it became a vendor, must be deemed to be made in the course or furtherance of that vendor's enterprise in the tax period in which those receipts are received.
 
3)   Subject to section 18(4)(b), where a person is deregistered in terms of the Sixth Schedule to the Income Tax Act and registers as a vendor, any value-added tax paid on expenditure it incurred while it was a registered micro business may not be deducted by that vendor as input tax.
 
79. Amendment of Transfer Duty Act - section 9
 
Amends section 9 of the Transfer Duty Act, No.40 of 1949, by adding subsection (15).
 
80. Amendment of Transfer Duty Act - section 12
 
Amends section 12 of the Transfer Duty Act, No. 40 of 1949, by substituting subsection (2).
 
81. Amendment of Stamp Duties Act - section 23(4)(b)
 
Amends section 23(4)(b) of the Stamp Duties Act, No. 77 of
1968, by adding subparagraph (viii).
 
82. Amendment of Stamp Duties Act - section 24
 
1)   Amends section 24 of the Stamp Duties Act, No. 77 of
1968, as follows:-paragraph (a) deletes subsection (1); paragraph(b) substitutes subsection (2)(a); and paragraph (c) deletes subsections(2A), (3), (4), (5), (6), (7), (8) and (8A).
 
2)   Subsection (1) shall come into operation on the

 
 
 
 

                        

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commencement date: Provided that any stamp duty or other amount which but for such amendments would have been capable of being levied or recovered under subsection (4) of the said section 24 in respect of policies, certificates of insurance and endorsements thereon executed before that date and renewals thereof falling due before that date shall be levied, paid and recovered as if the said amendments had not been effected.
 
83. Amendment of Stamp Duties Act - Item 15 of Schedule 1
 
Amends Item 15 of Schedule 1 to the Stamp Duties Act, No. 77 of 1968, by adding subparagraph (v) under the heading "Exemptions from the duty under paragraph (3):".
 
84. Amendment of Stamp Duties Act - Item 18 of Schedule 1
 
1)   Amends Item 18 of Schedule 1 to the Stamp Duties Act, No. 77 of 1968, as follows:-paragraph (a) deletes paragraph (4) and (6); and paragraph (b) substitutes in
subsection (7) the words "any above-mentioned policy" for the words "any policy".
 
2)   Subsection (1) shall come into operation on the commencement date in respect of insurance policies, certificates of insurance and endorsements thereon executed on or after that date and renewals thereof falling due on or after that date.
 
85. Repeal of laws
 
1)   Subject to the provisions of subsection (2), the laws specified in Schedule 3 are with effect from the commencement date hereby repealed to the extent set out in the third column of that Schedule.
 
2)   [deleted by the Revenue Laws Amendment Act No. 60 of
2008] .

86. Act binding on State, and effect of certain exemptions from taxes
 
This Act shall bind the State, and no provision contained in any other law providing for an exemption from any tax or duty shall be construed as applying or referring, as the case may be, to the tax leviable under this Act unless such tax is specifically mentioned in such provision.
 
86A. Provisions relating to industrial development zones
 
Where a provision of the Customs and Excise Act, or the Manufacturing Development Act, 1993 (Act No. 187 of 1993), or a regulation made thereunder governing the administration of industrial development zones including a matter relating to
the liability for or levying of value-added tax or a refund thereof or a supply of goods or services subject to tax at the zero-rate is inconsistent or in conflict with a provision of this Act, the provision of this Act will prevail.
 
87. Short title
 
This Act shall be called the Value-Added Tax Act, 1991.

 
 
 
 

                        

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Schedules
 
Schedule 1: Exemption: Certain Goods
Imported into the Republic
 
(SECTION 13(3) OF THIS ACT)
 
Exemption: Certain Goods Imported into the Republic
 
Goods imported, as contemplated in section 13(1), including imports from or via Botswana, Lesotho. Namibia or Swaziland, into the Republic and in respect of which the exemption under the provisions of section 13(3) applies, are set forth below.
 
1.   Any of the following items imported into the Republic in respect of which the Controller has, in terms of the proviso to section
38(1)(a) of the Customs and Excise Act and which shall apply also to imports from or via Botswana. Lesotho, Namibia or Swaziland, granted permission that entry need not be made:
 
(i)    Containers temporarily imported; (ii)  human remains:
(iii) goods which in the opinion of the Commissioner are of no commercial value;
 
(iv) goods imported under an international carnet; and
 
(v)  goods of a value for customs duty purposes not exceeding R500, and on which no such duty is payable in terms of Schedule No.1 to the said Act.
 
2.   Goods, being printed books, newspapers, journals and periodicals, imported into the Republic by post of a value not exceeding R100 per parcel.
 
3.   Goods, being gold coins imported as such and which the Reserve Bank has issued in the Republic in accordance with the provisions of section 14 of the South African Reserve Bank

 
 
 
 

                        

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Act, 1989 (Act 90 of 1989), or which remain in circulation as contemplated in the proviso to subsection (1) of that section.
 
4.   Goods temporarily exported from the Republic which are, at the time of export. registered as such with the Controller, in such form as the Commissioner may prescribe, and thereafter returned to the exporter, no change of ownership having taken place. and which can be identified on re-importation.
 
5.   Goods permitted under conditions prescribed by the lnternational Trade Administration Commission which are forwarded unsolicited and free of charge by a non-resident to-
 
a)   a public authority or a municipality; or
 
b)   any association not for gain, which satisfies the Commissioner that such goods will be used by that association exclusively-
i)    for educational, religious or welfare purposes; or ii)   in the furtherance of that association's objectives
directed to the provision of educational, medical or
welfare services or medical or scientific research; or
 
iii)  for issue to, or treatment of, indigent persons:

full, by the lodging of a provisional payment or bond except where the Commissioner, in exceptional circumstances, otherwise directs. or in the circumstances contemplated in rule
120A.0l(c) of Chapter XllA of the Rules under the Customs and Excise Act. lf proof is not furnished to the Commissioner that the goods have been duly taken out of the Republic within a period of 30 days or within such further period as the Commissioner may in exceptional circumstances allow, this exemption shall he withdrawn and tax. penalty and interest must he paid.
 
7.   Goods consisting of-
 
a)   Goods and foodstuffs set forth in Part A and Part B of Schedule 2 to this Act, but subject to such conditions as may be prescribed in the said Part; or
 
b)   goods referred to in section 11(1)(f), but provided that such goods are supplied to and imported by the South African Reserve Bank, the South African Mint Company (Proprietary) Limited or any bank registered under the Banks Act, 1990 (Act No. 94 of 1990); or
 
c)

 
Provided that the recipient of the goods responsible for the distribution has furnished an undertaking that-
 
a)   such goods are for the exclusive use by the organisation or for free distribution;
 
b)   such goods will not be sold, leased, hired or otherwise disposed of for gain; and
 
c)   no consideration or other counter-performance may be accepted by any person in respect of such goods.
 
6.   Goods which are shipped or conveyed to the Republic for
trans-shipment or conveyance to any export country: Provided that the Controller ensures that the tax is secured. in part or in

i)    fuel levy goods referred to in fuel levy item no.-
 
aa) 195.10.03: Petrol, as defined in Additional Note 1(b) to Chapter 27 in Part 1 of Schedule No. 1 to the Customs and Excise Act, ;
 
bb) [deleted by the Amendment of Taxation Laws Act
No. 9 of 2006] ;
 
cc) [deleted by the Amendment of Taxation Laws Act
No. 9 of 2006]
 
dd) 195.10.17: Distillate fuel, as defined in Additional Note 1(g) to Chapter 27 in Part 1 of Schedule No. 1 to the Customs and Excise Act,

 
 
 
 

                        

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ee) 195.20.01: Biodiesel as defined in Additional Note
1(a) to Chapter 38 in Part 1 of Schedule No. 1 to the Customs and Excise Act; and
 
ff)   195.20.03: Other biodiesel,
 
in Part 5A of Schedule No. 1 to the Customs and
Excise Act; or
 
ii)   petroleum oil and oils obtained from bituminous minerals, known as crude, referred to in tariff heading no. 27.09 in Part 1 of Schedule No. 1 to the Customs and Excise Act, when supplied and imported for the purposes of being refined for the production of fuel levy goods as defined in section 1 of the Customs and Excise Act; or
 
iii)  [deleted by the Amendment of Taxation Laws Act No. 9 of 2006];
 
iv)  illuminating kerosene (marked) as defined in Additional Note 1(f) to Chapter 27 in Part 1 of Schedule No. 1 to the Customs and Excise Act, referred to in fuel levy item no. 195.10.13 in Part 5A of Schedule No. 1 to the Customs and Excise Act and which are not mixed or blended with another substance.
 
8.   In this paragraph. goods exempt from the levying of tax, are identified by heading numbers or rebate items and the descriptions as contemplated in Schedule 1 and Schedule 4 to the Customs and Excise Act, respectively. In some instances the exemptions below contain additional requirements or limitations or relaxations which differ from the Customs and Excise Act. Where any provisions of the Customs and Excise Act and the Schedules thereto provide otherwise, the provisions of this Schedule shall prevail.
 
In order to qualify for an exemption-
 
(i)    the goods must fall under one of the descriptions below;

(ii)  any requirements or limitations contained in that particular description must be complied with; and
 
(iii) the Notes below must be complied with,
 
regardless of whether or not the goods are required to be entered, customs duty is payable or a rebate of customs duty is granted in terms of the Customs and Excise Act.
 
SUBHEADING             DESCRIPTION NOTES:
 
1.   The following exemptions, identified by Subheadings, shall be subject to the Notes as contemplated in Schedule No.1 to the Customs and Excise Act.
 
4907.00.30                    Travellers' cheques and bills of exchange, denominated in a foreign currency
 
4911 .10.20                   Publications and other advertising matter relating to fairs, exhibitions and tourism in foreign countries
 
ITEM NO.                      DESCRIPTION
 
406.00                           GOODS IMPORTED FOR DIPLOMATIC AND OTHER FOREIGN REPRESENTATIVES:
 
NOTES:
 
1.   This exemption (excluding item 406.03) is conditional upon reciprocal treatment accorded by the government of the mission or person requiring this exemption.
 
2.   This exemption (excluding item 406.03) is allowed only if the Director-General: Foreign Affairs or an official acting

 
 
 
 

                        

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under his or her authority has certified that a person requiring this exemption is listed in the register maintained by the Department of Foreign Affairs in accordance with the Diplomatic Immunities and Privileges Act, 2001.
 
3.   For the purposes of item no. 406.03, "an organisation or institution" means an organisation which the Director- General: Foreign Affairs or an official acting under his or her authority has certified as an organisation or institution with which the Republic has concluded a formal agreement, which provides, inter alia, for the granting of such exemption.
 
4.   This exemption is not allowed to South African citizens or permanent residents of the Republic. unless the Government of the Republic has, by agreement with an organisation or institution contemplated in Note No. 3,
undertaken to grant an exemption to a South African citizen who is a representative, member, agent or officer, but excluding a delegate, with or to such organisation or institution.
 
5.   A motor vehicle exempted in terms of item no,'s 406.02, 406.03, 406.05 or
406.07, may not be offered, advertised, lent, hired, leased, pledged. given
away. exchanged. sold or otherwise disposed of within a period of two years from the date of importation:

Provided that any one of the foregoing acts with this vehicle within a period of two years from the date of importation renders the importer of the vehicle liable to pay tax as determined by the Commissioner in consultation with the Director-General:Foreign Affairs.
 
6.   For the purposes of item no.'s 406.02,
406.03 and 406.05 "members of their famiIies" means the spouse, any unmarried child under the age of 21 years. any unmarried child between the ages of 21 and 23 years who is undertaking full-time studies at an educational institution, and any unmarried child who is due to physical or mental disability incapable of self- support, and any other relative
specially approved by the Minister of Foreign Affairs, who forms part of the household of any such member or person, as the case may be, or who joins any such household during visits to the Republic.
 
7.   For the purposes of Note no. 6 "spouse" means the partner of that person-
 
a)   in a marriage or customary union recognised in terms of the laws of the Republic;
 
b)   in a union recognised as a marriage in accordance with the tenets of
any religion; or
 
c)   in a same-sex or heterosexual

 
 
 
 

                        

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union which the Commissioner is
   
407.00
 
GOODS IMPORTED BY IMMIGRANTS,
satisfied is intended to be     TOURISTS, RETURNING RESIDENTS
permanent.     AND OTHER PASSENGERS, FOR THEIR

406.02/00.00/01.00       Goods for the official use by a diplomatic mission and goods for the personal or official use by diplomatic representatives accredited to a diplomatic mission and members of their families
 
406.03/00.00/0 1.00     Goods for the personal or official use by members, agents. officers, delegates or permanent representatives of, to, or with an organisation or institution, and members of their families
 
406.05/00.00/01.00       Goods for the official use by a consular mission and goods for the personal or official use by consular representatives accredited to a consular mission and foreign representatives (excluding those
referred to in item no.'s 406.02 and 406.03), and members of their families
 
406.06/00.00/01.00       Stationery, uniforms, furniture and equipment for the official use by a consular post headed by an honorary consular officer
 
406.07/00.00/01.00       Goods (excluding food, drink and tobacco in any form) imported by administrative and technical representatives accredited to diplomatic or consular missions, on their first entry on appointment by their governments, for their personal or official use, provided the said goods are imported with the approval of the Director-General: Foreign Affairs

PERSONAL USE:
 
NOTES:
 
1.   The exemption in terms of item no.
407.01/00.00/01.02 is allowed only if the goods can be identified as being
the same goods which were taken from the Republic.
 
2.   The exemption in terms of item no.
407.02 is not allowed for firearms acquired abroad or at any duty-free shop and imported by residents of the Republic returning after an absence of less than 6 months.
 
3.
 
a)   The exemption in terms of item no.
407.02 is allowed only once per person during a period of 30 days and is not allowed for goods imported by persons returning after an absence of less than 48 hours.
 
b)   The exemption in terms of item no.
407.02, with the exception of the exemption in respect of tobacco and alcoholic products. is allowed to children under 18 years of age, whether or not they are accompanied by their parents or guardians, provided the goods are for use by the children themselves.
 
c)   For the purposes of item no.

 
 
 
 

                        

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407.02, any goods obtained from an inbound duty and tax free shop as contemplated in the rules to section 21 of the Customs and Excise Act, must be regarded as imported goods.
 
4.   A member of the crew of a ship or aircraft (including the master or pilot) is, subject to the conditions laid down by the Commissioner-
 
a)   only entitled to the exemption in terms of item no.
407.02/00.00/01.00 if the total value of the goods declared under this item does not exceed R200-00 (or such other amount as the Minister may fix by notice in the Gazette).
 
b)   only entitled to the exemption in terms of Item no.
407.02/00.00/02.00 provided the total value of goods declared under this item does not exceed R1 500 (or such other amount as the Minister may fix by notice in the Gazette)
 
4A) The exemption in item no.
407.02/00.00/02.00 is only applicable if the total value of the goods declared under item no. 407 (excluding goods provided for in item no. 407.01) does not exceed R15 000 (or such other amount as the Minister may fix by way of a notice in the Gazette).

48) If the person concerned so desires and indicates accordingly before the goods are cleared, the goods in respect of which the exemption in item no.
407.02/00.00/02.00 is applicable, may be cleared at the rates of duty specified in Schedule No. 1 to the Customs and Excise Act and with payment of VAT at the standard rate
 
4C) If a person contravenes any provision
of this Act, the Customs and Excise Act or any other law relating to the importation of goods, the
Commissioner may refuse to grant any exemption provided for in Item no.
407.02.
 
5.   For the purposes of item no. 407.04/
87.00/01.00(i) the vehicle in question shall not be deemed to be personally owned and used personally by the importer unless such importer was, at all reasonable times, personally present at the place where the vehicle was
used by him or her, and the importer shall be deemed to have used that vehicle from the date on which he or she took physical delivery of the vehicle until the date on which the vehicle was delivered by him or her to the shippers or other agent for the purpose of shipment or dispatch.
 
6.   For the purposes of item no. 407.04,
the importer shall, if he or she is absent for a continuous period of longer than 3 months from the place where the

 
 
 
 

                        

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vehicle is usually used in the Republic. not be deemed to have imported the vehicle for his or her personal or own use, and tax as determined by the Commissioner is payable as from the date of such absence.
 
7.   The exemption in terms of item 407.04 is allowed only once per family during a period of 3 years.
 
407.01                          8.   Personal effects, sporting and recreational equipment, new or used:
 
407.02                          Goods imported as accompanied passengers' baggage, including goods obtained at a licensed inbound duty and tax free shop either by non-residents or
residents of the Republic and cleared at the place where such persons disembark or enter the Republic;
 
Personal effects and sporting and recreational equipment, new or used:
 
407.01/00.00/01.01       Imported either as accompanied or unaccompanied passengers' baggage by non-residents of the Republic for their own use during their stay in the Republic
 
407.01/00.00/01.02       Exported by residents of the Republic for their own use while abroad and subsequently re-imported either as accompanied or unaccompanied passengers' baggage by such residents
 
407.02/00.00/01.00       New or used goods, of a total value not exceeding R3 000 per person (or such other amount as the Minister may fix by notice in the Gazette)

407.02/00.00/02.00       Additional goods, new or used, of a total value not exceeding R12 000 per person (or such other amount as the Minister may fix by way of a notice in the Gazette), excluding goods of a class or kind specified in item no's. 407.02/22.00,
407.02/ 24.02, 407.02/24.03 and
407.02/33.03
 
Goods imported as accompanied passengers' baggage either by non-residents or residents of the Republic and cleared at the place where such persons disembark or enter the Republic:
 
407.02/22.00/01.00       Wine not exceeding 2 litres per person
 
407.02/22.00/02.00       Spirituous and other alcoholic beverages, a total quantity not exceeding 1 litre per person
 
407.02/24.02/01.00       Cigarettes not exceeding 200 and cigars not exceeding 20 per person
 
407.02/24.03/01.00       250g Cigarette or pipe tobacco per person
 
407.02/33.03/0 1.00     Perfumery not exceeding 50 ml and toilet water not exceeding 250 ml per person
 
407.02/00.00/01.00       [deleted by Revenue Laws Amendment Act
No. 31 of 2005]
 
407.02/00.00/02.00       [deleted by Revenue Laws Amendment Act
No. 31 of 2005].
 
Motor vehicles imported by natural persons for own use on change of permanent residence to the Republic:
 
407.04/87.00/01.00       One motor vehicle per family, imported by a natural person for his or her personal or own use, who permanently changes his or her residence to the Republic and-

 
 
 
 

                        

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(i)    provided the vehicle so imported is the personal property of the importer and has personally been owned and used by him or her for a period of not less than 12 months prior to his or her departure to the Republic; and
 
(ii)  provided the vehicle is not offered, advertised, lent, hired, leased, pledged, given away. exchanged, sold or otherwise disposed of within a period
of 20 months from the date of importation
 
Goods imported by natural persons for own use on change of residence to the Republic:
 
407.06/00.00/01.00       Household furniture, other household effects and other removable articles, including equipment necessary for the exercise of the calling, trade or profession of the person. other than industrial, commercial or agricultural plant and excluding motor vehicles, alcoholic beverages and tobacco goods. the bona fide property of a natural person (including
a returning resident of the Republic after an absence of six months or more) and members of his or her family, imported for own use on change of his or her residence to the Republic: Provided that these goods are not disposed of within a period of six months from the date of importation
 
409.00                          RE-IMPORTED GOODS: NOTES:
1.   The importer must, at the time of

entry of the goods upon re-importation, attach a statement to the bill of entry or other document prescribed in terms of the Customs and Excise Act. which indicates-
 
a)   the reasons for the goods being returned;
 
b)   whether any change in the ownership of the goods took place after their exportation from the Republic:
 
c)   whether the goods have been subjected to any process of manufacture or manipulation after their exportation from the Republic and if so, to what extent;
 
d)   the number and date of the bill of entry or other document prescribed in terms of the Customs and Excise Act, relating to the export of the goods and the place where such entry was made or the document
on which the goods were registered prior to export of such goods for the purposes of the subsequent re-importation thereof; and
 
e)   the place where and the number and date of the bill of entry or other document prescribed in terms of the Customs and Excise Act, on which tax was paid on the goods upon their first importation into the Republic or other documents, if

 
 
 
 

                        

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applicable, to prove that the goods were previously imported and tax due was paid thereon.
 
2.   This exemption (excluding item no.
409.07) is allowed only if the goods can be identified as being the same goods which were exported
3.   For the purposes of item no. 409.07- a)   "compensating products" means
the products obtained abroad
during or as a result of the manufacturing, processing or repair of the goods temporarily exported for outward processing; and
 
b)   "temporarily exported for outward processing" means the customs procedure whereby goods which may be disposed of without customs restriction, are temporarily exported for manufacturing, processing or repair abroad and then re-imported.
 

returned to or brought back by the exporter 409.04/00.00/01.00 Imported or locally manufactured articles
or any other party. without having been   sent abroad for processing or repair.
subjected to any process of manufacture or   provided they are exported under customs
manipulation, no change of ownership   and excise supervision, retain their
having taken place subsequent to their   essential character, are returned to the
exportation from the Republic, and which   exporter. no change of ownership having
can be identified on re-importation as   taken place subsequent to their exportation
being the same goods: Provided that this   from the Republic. and can be identified on
exemption shall not apply if-   reimportation: Provided that this exemption
    shall apply only to the extent of the value of
409.01/00.00/01.00       Imported goods (including packing containers) re-exported and thereafter

i)    the supply of those goods was charged with tax at the rate of zero per cent in terms of section 11(1)(a): or
 
ii)   a refund in terms of section 44(9) is granted
 
409.02/00.00/01 .00     Goods (including packing containers) produced or manufactured in the Republic, exported therefrom and thereafter returned to or brought back by the exporter or any other party. without having been subjected to any process of manufacture or manipulation (excluding excisable goods exported ex a customs and excise warehouse). no change of ownership having taken place subsequent to their exportation from the Republic, and which can be identified on re-importation as
being the same goods: Provided that this exemption shall not apply if-
 
i)    the supply of those goods was charged with tax at the rate of zero per cent in terms of section 11(1)(a): or
 
ii)   a refund in terms of section 44(9) is granted

 
 
 
 

                        

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the goods sent from the Republic on the day such goods left the Republic
 
409.06/00.00/01.00       Excisable goods exported to a customs and excise warehouse and thereafter returned to or brought back by the exporter without having been subjected to any process of manufacture or manipulation
and no change of ownership having taken place subsequent to their exportation from the Republic: Provided that this exemption shall not apply if-
 
i)    the supply of those goods was charged with tax at the rate of zero per cent in terms of section 11(1)(a): or
 
ii)   a refund in terms of section 44(9) is granted
 
409.07/00.00/01.00       Compensating products (excluding goods liable to the duties specified in Part 2 of Schedule No. 1 to the Customs and Excise Act) obtained abroad from goods temporarily exported for outward processing, in terms of a specific permit issued by the International Trade Administration Commission, provided-
 
i)    the specific permit is obtained before the temporary exportation of the goods;
 
ii)   if the ownership of the compensating products is transferred prior to entry for customs purposes. such goods are entered in the name of the person who exported the goods;
 
iii)  any additional conditions which may be

stipulated in the said permit. are complied with; and
 
iv)  that this exemption shall apply only to the extent of the value of the goods sent from the Republic on the day such goods left the Republic
 
412.00                           GENERAL: NOTES:
1.   For the purposes of item no.'s 412.03 and 412.04, the bill of entry or other document prescribed in terms of the Customs and Excise Act must be supported by an inventory of the goods and docurnentary proof that the goods qualify for exemption under these
items.
 
2.   For the purposes of item no.'s 412.26 and 412.27, such exemptions are subject to compliance with sections 39 and 40 of the Customs and Excise Act and which shall apply also to imports from or via Botswana, Lesotho, Namibia or Swaziland.
3.   For the purposes of item no. 412.28- a)   A duty and tax free shop means a
duty and tax free shop as
contemplated in the rules for section 21 of the Customs and Excise Act; and
 
b)   Any word or expression used in relation to a duty and tax free shop shall have the meaning assigned

 
 
 
 

                        

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thereto in the rules for section 21 of the Customs and Excise Act.
 
412.03/00.00/01.00       Used personal or household effects (excluding motor vehicles) bequeathed to persons residing in the Republic
 
412.04/00.00/01.00       Used property of a person normally resident in the Republic who died while temporarily outside the Republic
 
412.10/00.00/01.00       Bona fide unsolicited gifts of not more than two parcels per person per calendar year and of which the value per parcel does not exceed R400 (excluding goods contained
in passengers' baggage, wine, spirits and manufactured tobacco (includng cigarettes and cigars)) consigned by natural persons abroad to natural persons in the Republic
 
412.11/00.00/01.00       Goods imported-
 
a)   for the relief of distress of persons in cases of famine or other national disaster:
 
b)   under any technical assistance agreement: or
 
c)   in terms of an obligation under any multilateral international agreement to which the Republic is a party:
 
Provided that-
 
i)    the importation of any goods under this item shall he subject to a certificate issued by the International Trade Administration Commission and to
such other conditions as may he

agreed upon by the Governments of the Republic. Botswana. Lesotho. Namibia and Swaziland; and
 
ii)   goods imported under this item shall not he sold or disposed of to any party who is not entitled to any privileges under the item, or he removed to the area of Botswana. Lesotho. Namihia or Swaziland without the permission of
the International Trade Administration
Commission.
 
412.12/00.00/01.00       Goods imported for any purpose agreed upon between the Governments of the Republic. Botswana. Lesotho, Namibia and Swaziland: Provided that-
 
i)    the provisions of this item shall not apply in respect of any consignment or quantity or class of goods unless the prior approval of the Governments of Botswana, Lesotho, Namibia and Swaziland has been obtained for the application of such provisions in respect of every such consignment or quantity or class of goods;
 
ii)   the importation of any goods under this item shall be subject to a certificate issued by the International Trade Administration Commission and to
such other conditions as may be agreed upon by the Governments of the Republic. Botswana, Lesotho. Namibia and Swaziland: and
 
iii)  goods imported under this item shall not be sold or disposed of to any party

 
 
 
 

                        

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who is not entitled to any privileges under the item, or be removed to the area of Botswana. Lesotho. Namibia or Swaziland without the permission of
the Commissioner
 
4 12.26/00.00/01.00      Goods (excluding goods for upgrading) supplied free of charge to replace defective goods which are covered by a warranty agreement: Provided that-
 
a)   a copy of the bill of entry or other document prescribed in terms of the Customs and Excise Act and the documents submitted in support of such document under which the goods were originally entered for home consumption are submitted:
 
b)   the goods are supplied by the original supplier; and
 
c)   proof that the replaced goods have been exported to the original supplier is submitted or the replaced goods are disposed of as directed by the Commissioner
 
412.28                          Goods supplied by a licensee of a special customs and excise storage warehouse licensed as a duty and tax free shop:
 
412.28/00/00.01.00       Goods supplied by a licensee of an inbound duty and tax free shop to inbound travellers.
 
413.00                          IMPORTED GOODS FOR SALE, CONSUMPTION OR USE DURING 2010
FIFA WORLD CUP SOUTH AFRICA

WHEN IMPORTED AND ENTERED BY QUALIFYING PERSONS AND EMPLOYEES OF QUALIFYING PERSONS
 
NOTES:
 
For the purposes of this item 413.00-
 
1)   …….
 
a)   the definitions in Schedule 1 of the
Revenue Laws Amendment Act,
2006 shall, as may be applicable, apply in respect of any item or Note provided for in this item; and
 
b)   ''qualifying person'' means-
 
i)    FIFA and FIFA subsidiaries; ii)   FIFA National Associations; iii)  FIFA Confederations;
iv)  Media Representatives;
 
v)   Commercial Affiliates;
 
vi)  Merchandising Partners;
 
vii) Licensees;
 
viii) FIFA Flagship Store Operator;
 
ix)  FIFA Designated Service Providers including the pitch importer, Concession Operators, Hospitality Service Providers, design servicers, event management and marketing operations servicers and office suppliers; and

 
 
 
 

                        

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x)   The Host Broadcaster, Broadcasters and Broadcast Rights Agencies; and
 
c)   the FIFA Flagship Store Operator may only import consumable, semi-durable or promotional
Championship related goods under items 413.01, 413.02 and 413.03, excluding tobacco products and cosmetics, until one month after
the date of the closing ceremony of the 2010 FIFA World Cup South Africa.
 
2)
 
a)   Any goods imported under-
 
i)    item 413.01 that have not been sold as contemplated in that item;
 
ii)   item 413.02 that have not been consumed, used or distributed as contemplated in that item;
 
iii)  item 413.03 that have not been used as contemplated in that item; or
 
iv)  item 413.04 that have not been consumed during the secondment, shall be-
 
aa) entered for home consumption and payment of tax;
 
bb) abandoned or destroyed

under item 413.05;
 
cc) donated under item 413.06;
 
dd) exported within any period contemplated in paragraph (b); or
 
ee) otherwise dealt with as the Commissioner may determine.
 
b)   The goods contemplated in subparagraph (dd) of Note 2(a) shall be exported in the case of-
 
i)    goods imported by-
 
aa) FIFA and FIFA subsidiaries under item 413.01, 413.02 or 413.03 within a period of
24 months after the date of the Championship closing ceremony;
 
bb) qualifying persons, other than FIFA and FIFA subsidiaries, under item
413.01, 413.02 or 413.03, within a period of 12 months after the date of the Championship closing ceremony;
 
ii)   goods imported under item
413.04 within a period of 12 months after the date of the Championship closing ceremony:

 
 
 
 

                        

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Provided that the Commissioner may, on good cause shown, and subject to such conditions as he or she may impose, extend such periods.
 
c)   Goods not exported must be entered for payment of tax, abandoned, donated or otherwise dealt with as contemplated in paragraph (a), within such time as the Commissioner may determine.
 
3)
 
a)   Whenever goods are sold, distributed, donated, used contrary to the provisions of this item or not re-exported within the periods contemplated in Note 2(b), tax shall be payable upon demand by the Commissioner.
 
b)   The value for tax purposes in respect of goods contemplated in paragraph (a), shall be-
 
i)    the lower of the cost or market value on the earlier of the-
 
aa) date upon which such goods are sold, donated or used contrary to the relevant item; or
 
bb) date of expiry of the applicable period for re- exportation,
 
as if the goods were imported on that date;

ii)   if donated otherwise than contemplated in item 413.06, the lower of the cost or market value on the date of that donation as if the goods were imported by the donee (recipient) on that date;
 
iii)  if disposed of by a person to whom donated in terms of item
413.06 within five years after the date of acquiring the donation, the lower of the cost or market value at the date of the donation as if the goods were imported on that date;
 
c)   Whenever tax is payable, the rate of tax shall be the rate applicable on the date contemplated in paragraph (b).
 
4)   Any import under item 413.04 shall be supported by an inventory of all household goods and by the particulars of any motor vehicle imported for own use which shall include its colour, make, model, chassis number and engine number.
 
5)   For the purposes of item 413.05 any offer to abandon or any application to destroy goods shall be made in writing by, or on behalf of, the qualifying person, employee or donee contemplated in the items concerned and shall-
 
a)   include the bill of entry and all

 
 
 
 

                        

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applicable invoices and other documents relating to the importation of the goods; and
 
b)   state the identifying particulars of the goods.
 
6)   Notwithstanding other paragraphs or items provided for in this Schedule, goods may only be imported and entered for sale, consumption or use in the 2010 FIFA World Cup South Africa under item 413.00.
 
413.01/00.00/01.00      Consumable or semi-durable goods imported by qualifying persons for sale at any site during the Championship.
 
413.02/00.00/01.00       Goods, including consumable goods and promotional material individually of little value imported by qualifying persons not for sale but for consumption, use or distribution in connection with the Championship.
 
413.03/00.00/01.00       Samples of consumable and semi-durable goods imported by a qualifying person not for sale, but for distribution at any site during the Championship.
 
413.04/00.00/01.00       Household furniture, other household effects and other removable articles, excluding alcoholic beverages and tobacco goods, including equipment necessary for the exercise of his or her calling, trade or profession and one motor vehicle, the bona fide property of any employee, not resident in the Republic for income tax purposes, of any qualifying person and members of his

or her family, imported for own use on his or her temporary secondment to the Republic for purposes of the 2010 FIFA World Cup South Africa.
 
413.05/00.00/01.00       Goods of any description cleared under items 413.01, 413.02, 413.03 and 413.04 unconditionally abandoned to the Commissioner or goods destroyed with the permission of the Commissioner: Provided that the Commissioner may decline to accept abandonment or grant permission for destruction.
 
413.06/00.00/01.00       Goods of any description cleared under items 413.01, 413.02, 413.03 and 413.04 unconditionally donated to a person
exempt from income tax in terms of section
10 of the Income Tax Act, or any public benefit organisation as contemplated in paragraph (a) of the definition of 'public benefit organisation' in section 30(1) of that Act that has been approved by the Commissioner in terms of section 30(3) of that Act: Provided that if the goods are disposed of by that person or public
benefit organization within five years from the date of acquiring such donation, tax shall be payable as contemplated in Note
3.
 
412.27/00.00/01.00       Goods for upgrading supplied free of charge to replace parts which are covered by a warranty agreement: Provided that-
 
a)   a specific permit issued by the International Trade Administration Commission, is submitted;

 
 
 
 

                        

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b)   a copy of the bill of entry or other document prescribed in terms of the Customs and Excise Act and the documents submitted in support of such document under which the goods were originally entered for home consumption are submitted;
 
c)   the goods are supplied by the original supplier; and
 
d)   proof that the replaced goods have been exported to the original supplier is submitted or the replaced goods are disposed of as directed by the Commissioner
 
470.00                          GOODS TEMPORARILY ADMITTED FOR PROCESSING. REPAIR, CLEANING, RECONDITIONING OR FOR THE MANUFACTURE OF GOODS EXCLUSIVELY FOR EXPORT:
 
NOTES:
 
1.   The Commissioner may require the importer to register a rate of yield of the processed or manufactured goods that will be obtained per unit of the
imported goods.
 
2.
 
a)   The exemption in terms of item no.'s 470.01 or 470.03 is allowed only for goods to be used for the processing or manufacture of goods for export and the processed or manufactured goods
must be exported within 12 months

from the date of importation thereof.
 
b)   The exemption in terms of item no.
470.02 is allowed only for parts to be used and the goods submitted for repair. cleaning or reconditioning must be exported within 6 months from the date of importation thereof:
 
Provided that-
 
i)    the Commissioner may. in exceptional circumstances. extend the period specified in each case for a further period as deemed reasonable: and
 
ii)   the application for such extension is made prior to the expiry of the period of 1 2 months or 6 months. as the case may be.
 
3.   This exemption is allowed only if the Controller ensures that the tax is secured, in part or in full. by the lodging of a provisional payment or bond
except where the Commissioner, in exceptional circumstances. otherwise directs. or in the circumstances contemplated in rule 120A.01(c) of Chapter XllA of the Rules under the Customs and Excise Act.
 
4.   lf proof is not furnished to the Commissioner that the goods imported have been repaired, cleaned,

 
 
 
 

                        

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reconditioned, processed or used in repairing. cleaning, reconditioning or processing and have been duly exported within the time period prescribed in note number 2, this exemption shall he withdrawn and tax, penalty and interest must be paid.
 
470.01/00.00/01.00       Goods for processing, provided such goods do not become the property of the importer
 
470.02/00.00/01.00       Goods (including parts therefore) for repair, cleaning or reconditioning
 
470.02/00.00/02,00       Parts for goods temporarily imported fo repair. cleaning or reconditioning
 
470.03/00.00/01.00       Goods for use in the manufacturing. processing, finishing, equipping or packing of goods exclusively for export
 
480.00                          GOODS TEMPORARILY ADMITTED FOR SPECIFIC PURPOSES:
 
NOTES:
 
1.   The exemption in terms of item no.
480.35 is allowed-
 
a)   only if the samples are imported by-
 
i)    commercial travellers and other representatives of firms abroad who visit the Republic temporarily with their samples for the purpose of securing orders;
 
ii)   persons or firms established in

the Republic, including agents for foreign firms, to whom samples may be sent by firms abroad, free of charge, for the same purpose; or
 
iii)  a prospective customer in the Republic to whom a sample is sent on free loans for inspection and demonstration with a view to obtaining an order for similar goods:
 
b)   except with the permission of the Commissioner. for only one sample of each description, range. type or colour of an article: and
 
c)   only if each sample is an article representative of a particular category of goods already produced or to be produced abroad, imported solely for the purpose of being shown or demonstrated free of charge to prospective customers.
 
2.   All goods shall be re-exported-
 
a)   in the case of goods under an international earnet within the period of validity of such carnet; and
 
b)   in the ease of other goods within 6 months from the date of importation, thereof or within such further period as the Commissioner may in exceptional circumstances,

 
 
 
 

                        

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allow.
 
3.   This exemption is allowed only if the Controller ensures that the tax is secured. in part or in full, by the lodging of a provisional payment or bond
except where the Commissioner, in exceptional circumstances. otherwise directs, or in the circumstances contemplated in rule 120A.01(c) of Chapter XllA of the Rules under the Customs and Excise Act.
 
4.   lf proof is not furnished to the Commissioner that the goods have been duly re-exported within the time period prescribed in note no. 2. this exemption shall be withdrawn and tax, penalty and interest must be paid.
 
5.   Notwithstanding this exemption. the importer shall remain liable for tax, until he proves that the goods have been duly re-exported or that the goods
have been exported under the supervision of an officer, as defined in section 1 of the Customs and Excise Act.
 
6.   On request by the importer. and subject to the permission of the Commissioner. temporary admission may be
terminated by entering the goods for home consumption or by abandonment or destruction of the goods whereupon tax must be paid.
 
480.05/00.00/01.00       Containers and other articles used. as packing. whether or not filled at the time of

importation: Provided that such articles do not become the property of the importer
 
480.10/00.00/0l.00        Goods for display or use at exhibitions, fairs, meetings or similar events
 
480. 15/00.00/01 .00    Professional equipment (including ancillary apparatus and accessories) owned by persons resident abroad, for use solely by or under the supervision of a visiting person
 
480.20/00.00/01 .00     Welfare material for seafarers for cultural, educational, recreational, religious or sporting activities
 
480.25/00.00/01 .00     lnstruments, apparatus and machines (including accessories therefore), for use by institutions approved by the Commissioner. for scientific research or education
 
480.30/00.00/01.00       Models, instruments, apparatus, machines and other pedagogic material (including accessories therefore) imported by institutions approved by the Commissioner, for educational or vocational training
 
480.35/00.00/01.00       Commercial samples owned abroad and imported for the purpose of being shown or demonstrated in the Republic for the soliciting of orders for goods to be supplied from abroad
 
490.00                           GOODS TEMPORARILY ADMITTED SUBJECT TO EXPORTATION IN THE SAME STATE:
 
NOTES:
 
1.   Goods shall be re-exported-

 
 
 
 

                        

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a)   in the case of goods under an intemational carnet within the period of validity of such carnet; and
 

months from the date of or destruction of the goods whereup
tax must be paid.
importation thereof or within such
further period as the Commissioner 490.03/87.00/01.00 Private motor vehicles belonging to a
may in exceptional circumstances   person taking up temporary residence in
allow.   the Republic
b)   in the case of other goods within 6

5.   On request by the importer. and subject to the permission of the Commissioner, temporary admission may be
terminated by entering the goods for home consumption or by abandonment
on

 
 
 
 

2.   This exemption is allowed only if the Controller ensures that the tax is secured, in part or in full, by the lodging of a provisional payment or bond
except where the Commissioner. in exceptional circumstances, otherwise directs, or in the circumstances contemplated in rule 120A.01(c) of Chapter XllA of the Rules under the Customs and Excise Act.
 
3.   lf proof is not furnished to the Cornmissioner that the goods have been duly re-exported within the time period prescribed in note no. 1, this exemption shall be withdrawn and tax, penalty and interest must be paid.
 
4.   Notwithstanding this exemption, the importer shall remain liable for tax. until he proves that the goods have been duly re-exported or that the goods
have been exported under the supervision of an officer, as defined in section 1 of the Customs and Excise Act.

490.05/00.00/0 1.00     Postcards and other mail matter, imported in bulk, for despatch to addresses beyond the borders of the Republic
 
490.10/00.00/01.00       Models or prototypes, to he used in the manufacture of goods
 
490.11/00.00/01.00       Matrices, blocks, plates, and similar articles, on loan or hire, for printing illustrations in periodicals or books
 
490. 12/00.00/01 .00    Matrices, blocks, plates, moulds and similar articles, on loan or hire, to be used in the manufacture of articles that are to be delivered abroad
 
490.1 3/00.00/01 .00    instruments, apparatus. machines and other articles to be tested by the South African Bureau of Standards
 
490.14/00.00/01.00       lnstruments, apparatus and machines, made available free of charge to a
customer by or through a supplier, pending delivery or repair of similar goods
 
490.15/00.00/01.00       Costumes, scenery and other theatrical equipment on loan or hire to dramatic societies or theatres

 
 
 
 

                        

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490.20/00.00/01 .00     Animals and sport requisites (including yachts and motor vehicles) belonging to a person resident abroad, for use by that person or under his supervision in sports contests (including motor car rallies and transcontinental excursions)
 
490.25/00.00/01.00       Photographs and transparencies to be shown in a public exhibition or competition for photographers
 
490.30/00.00/01.00       Specialised equipment arriving by ship and used on shore at ports of call for the loading, unloading or handling of
containers of tariff heading No. 86.09 of Schedule No. 1 to the Customs and Excise Act
 
490.35/00.00/01.00       Pallets, whether or not laden with cargo at importation
 
490.40/00.00/01.00       Machinery or plant (excluding tower cranes) for use on contract in civil engineering or construction work, in such quantities and at such times and subject to such conditions as the Commissioner, on the recommendation of the International Trade Administration Commission, may allow by specific permit
 
490.50/00.00/01.00       Motor vehicles, yachts and other removable articles (including spare parts and normal accessories and equipment therefore) imported by foreign tourists and travellers resident in foreign countries for their own use
 
490.60/00.00/01 00      Commercial road vehicles used in the conveyance of imported merchandise

490.90/00.00/01.00       Machinery or plant (excluding tower cranes) for use on contract other than for purposes of civil engineering or construction work, in such quantities and at such times and subject to such conditions as the Commissioner, on the recommendation of the International Trade Administration Commission may allow by specific permit
 
490.90/00.00/02.00       Goods not specified in item no.'s 470.00,
480.00 or 490.00, temporarily admitted for purposes approved by the Commissioner.

 
 
 
 

                        

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Schedule 2 - Part A
 
Zero Rate: Supply of Goods Used or Consumed for Agricultural, Pastoral or other Farming Purposes
 
(Section 11(1)(G) of this Act)
 
1)   The goods in respect of the supply of which the rate of zero per cent shall apply under the provisions of section 11(1)(g) of this Act shall, subject to the provisions of paragraph 2, be as hereinafter set forth:
 
Item No.                       Description
Item 1                            Animal feed, i.e. goods consisting of- (a) (i)    any substance obtained by a
process of crushing, gristing or grinding, or by addition to any substance or the removal therefrom of any ingredient; or
 
(ii)  any condimental food, vitamin or mineral substance or other substance which possesses or is alleged to possess nutritive properties; or
 
(iii) any bone product; or
 
(iv) any maize product,
 
intended or sold for the feeding of livestock, poultry, fish or wild animals (including wild birds); or
 
(b) any stock lick or substance which is of a kind which can be and is in fact used

 
 
 
 

                        

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as a stock lick, whether or not such stock lick or substance possesses medicinal properties.
 
Item 2                            Animal remedy, i.e. goods consisting of a substance intended or offered for use in respect of livestock, poultry, fish or wild animals (including wild birds), for the diagnosis, prevention, treatment or cure of any disease, infection or other unhealthy condition, or for the maintenance or improvement of health, growth, production or working capacity.
 
Item 3                            Fertilizer. i.e. goods consisting of a substance in its final form which is intended or offered for use in order to
improve or maintain the growth of plants or the productivity of the soil.
 
Item 4                            Pesticide, i.e. goods consisting of any chemical substance or biological remedy, or any mixture or combination of any such substance or remedy, intended or offered for use-
 
(a) in the destruction, control, repelling, attraction, disturbance or prevention of any undesired microbe, alga, bacterium, nematode, fungus, insect, plant, vertebrate or invertebrate; or
 
(b) as a plant growth regulator, defoliant, desicant, adjuvant or legume inoculant,
 
and anything else which the Minister of Agriculture has by notice in the Gazette declared to be a pesticide.
 
Item 5                            Plants, i.e. goods consisting of living trees

and other plants, bulbs, roots, cuttings and similar plant products in a form used for cultivation.
 
Item 6                            Seed in a form used for cultivation.
 
2)   The provisions of paragraph 1 shall apply only if-
 
a)   the Commissioner , in respect of a vendor registered under this Act, is satisfied that that vendor, being the recipient of any such goods, carries on agricultural, pastoral or other farming operations and has issued to him a notice of registration in which authorization is granted whereby the goods concerned may be supplied to him at the rate of zero per cent: Provided that where a vendor to whom such notice of registration has been issued is in default in
respect of his obligation under this Act to furnish any return or to pay tax or he has ceased to carry on the said operations or he has utilized such notice of registration for purposes other than the carrying on of such operations, the Commissioner may, by notice in writing to the vendor, cancel such authorization with immediate effect or with effect from a date determined by the Commissioner and require the vendor to surrender such notice of registration
in order that an amended notice of registration, excluding the said authorization, may if necessary be issued to the vendor;
 
b)   the goods concerned are supplied to a vendor who is in possession of a valid notice of registration as a vendor and an authorization contemplated in paragraph (a);
 
c)   a tax invoice in respect of the relevant supply is issued containing such particulars as required by section 20(4) of this Act,
 
d)   the acquisition, disposal, sale or use of the said goods is not prohibited in terms of section 7bis of the Fertilizers, Farm Feed, Agricultural Remedies and Stock Remedies Act, 1947 (Act No. 16 of 1947).

 
 
 
 

                        

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Schedule 2 - Part B
 
Zero Rate: Supply of goods consisting of certain foodstuffs
 
(Section 11(1)(j) of this Act)
 
1    The goods in respect of the supply of which the rate of zero per cent shall apply under the provisions of section 11(1)(j) of this Act shall, subject to the provisions of paragraph 2, be as hereunder set forth:
 
Item No.     Description
 
Item 1         Brown bread as defined in Regulation 1 of the Regulations in terms of Government Notice No. R.577 published in Government Gazette No. 13074 of 15
March 1991.
 
Item 2         Maize meal graded as super maize meal, special maize meal, sifted maize meal or unsifted maize meal, not further processed other than by addition of minerals and vitamins not exceeding one per cent by mass of the final product, solely for the purpose of increasing nutritional value.
 
Item 3         Samp, not further prepared or processed.
 
Item 4         Mealie rice, not further prepared or processed.
 
Item 5         Dried silo screened mealie or dried mealies not further prepared or processed or packaged as seed, but excluding pop corn (zea mays everta).
 
Item 6         Dried beans, whole, split, crushed or in powder form but not further prepared or processed or where packaged as seed.
 
Item 7         Lentils, dried, whole, skinned or split.

 
 
 
 

                        

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Item 8         Pilchards or sardinella supplied in tins or cans consisting mainly of such products regardless of whether flavoured, seasoned or preserved in oil, but excluding such products as are supplied as pet food or sardines supplied in tins or cans.
 
Item 9         Milk powder: unflavoured, being the powder obtained by the removal of water from milk and which falls under the following classifications determined by the Minister of Agriculture under the Agricultural Product Standards Act, 1990 (Act No. 119 of 1990), or any regulation
under that Act:
 
High-fat milk powder Full-fat milk powder Medium-fat milk powder Low-fat milk powder
Far-free milk powder,
 
provided the fat or protein content of such milk powder consists solely of milk fat or milk protein.
 
Item 10       Dairy powder blend, being any dairy powder blend which Falls under the following classifications determined by the Minister of Agriculture under the Agricultural Product Standards Act, 1990 (Act No. 119 of 1990), or any regulation under that Act:
 
High-fat dairy powder blend Full-fat dairy powder blend Medium-fat dairy powder blend Low-fat dairy powder blend
Fat-free dairy powder blend.

Item 11       Rice, whether husked, milled, polished, glazed, parboiled or broken.
 
Item 12       Vegetables, not cooked or treated in any manner except for the purpose of preserving such vegetables in their natural state, but excluding dehydrated, dried,
canned or bottled vegetables or such vegetables as are described under separate Items in this Part.
 
Item 13       Fruit. not cooked or treated in any manner except for the purposes of preserving such fruit in its natural stale. but excluding dehydrated, dried, canned or bottled fruit and nuts.
 
Item 14       Vegetable oil, marketed and supplied for use in the process of cooking food, but excluding olive oil.
 
Item 15       Milk, including high-fat, full-fat, low-fat or fat-free milk, being the milk of cattle, sheep or goats that has not been concentrated, condensed, evaporated. sweetened. flavoured, cultured or subjected to any other process other than homogenization or preservation by pasteurization, ultra-high temperature treatment, sterilization, chilling or freezing, or the addition of minerals, vitamins, enzymes and other similar additives not exceeding one per cent by volume of the final product, soleley for the purpose of increasing nutritional value.
 
Item 16       Cultured milk, being cultured milk as classified under the Agricultural Product Standards Act, 1990 (Act No.
119 of 1990), with the following class designation: Cultured high-fat milk
Cultured full-fat milk Cultured low-fat milk Cultured fat-free milk.

 
 
 
 





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Item 17       Brown wheaten meal, being pure, sound wheaten meal, but excluding separated wheaten bran, wheaten germ and wheaten semolina.
 
Item 18       Eggs, being raw eggs laid by hens of the species gallus domesticus, whether supplied in their shells or in the form of egg pulp being raw pulp consisting of the yolk and white which is obtained from such eggs after the shells have been removed.
 
Item 19       Edible legumes and pulse of leguminous plants, dried, whole, split, crushed. skinned or in powder form, but not further prepared or processed or where packaged as seed or such pulse as are described under separate Items in this Part.
 
2)   The provisions of paragraph I shall not apply where any goods mentioned in that paragraph are supplied in the course of carrying out any agreement for the furnishing or serving of any meal, refreshment, cooked or prepared food or any drink, as
the case may be, so as to be ready for immediate consumption when so supplied.
 
3)   .....

Schedule 3: Laws Repealed
 

Number and
Year of Law
 
Short Title
 
Extent of Repeal
Act No. 103 of 1978 Sales Tax Act, 1978 The Whole
Act No. 111 of 1979 Sales Tax Amendment
Act, 1979
 
The Whole
Act No. 105 of 1980 Sales Tax Amendment
Act, 1980
 
The Whole
Act No. 97 of 1981 Sales Tax Amendment
Act, 1981
 
The Whole
Act No. 40 of 1982 Sales Tax Amendment
Act, 1982
 
The Whole
Act No. 90 of 1982 Second Sales Tax
Amendment Act, 1982
 
The Whole
Act No. 95 of 1983 Sales Tax Amendment
Act, 1983
 
The Whole
Act No. 99 of 1984 Sales Tax Amendment
Act, 1984
 
The Whole
Act No. 102 of 1985 Sales Tax Amendment
Act, 1985
 
The Whole
Act No. 70 of 1986 Sales Tax Amendment
Act, 1986
 
The Whole
Act No. 108 of 1986 Taxation Laws
Amendment Act, 1986
Sections 14, 15 and 16
Act No. 31 of 1987 Sales Tax
Amendment Act, 1987
 
The Whole
(Section 85 of this Act)

 
 
 
 


Act No. 86 of 1987 Taxation Laws
Amendment Act, 1987
 
Sections 12 to 25
Act No. 87 of 1988 Taxation Laws
Amendment Act, 1988
 
Sections 37 to 47
Act No. 69 of 1989 Taxation Laws
Amendment Act, 1989
 
Sections 17 to 25
Act No. 89 of 1990 Taxation Laws
Amendment Act, 1990
 
Sections 1 to 7
                        

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Regulations
 
GNN 2570 - Determination of category of business
 
Department of Finance
 
No. 2570 - 21 October 1991
 
I, Dawid Jacobus de Villiers, Acting Minister of Finance, hereby determine under item (cc)(A) of paragraph (c)(iv) of the definition of "enterprise" in section 1 of the Value-Added Tax Act, 1991 (Act No. 89 of 1991), for the purposes of the said
item, the following categories of businesses to be categories of businesses in respect of which the provisions of the said paragraph shall be deemed to apply:
 
·     Abattoirs.
 
·     Farming.
 
·     Parking grounds and garages.
 
·     Produce markets.
 
·     Township development.
 
·     Letting of commercial and industrial buildings.
 
·     Airports.
 
·     Quarries and sale of sand.
 
·     Cement-making.
 
·     Caravan parks, pleasure and holiday resorts.
 
·     Nurseries.
 
·     Hiking trails.
 
·     Brickyards.

 
 
 
 

                        

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·     Liquor sales.
 
·     Provision of computer services.
 
·     Game farms.
 
·     Cattle pens and auction facilities.
 
 
DJ de Villiers
 
Acting Minister of Finance

GNN 2835 - Directions for purposes of section 10(8) and (13)
 
Department of Finance
 
No. 2835 - 22 November 1991
 
I, Barend Jacobus du Plessis, Minister of Finance, hereby prescribe in terms of subsections (8) and (13) of section 1O of the Value- Added Tax Act, 1991 (Act No. 89 of 1991), that the consideration in money for the supplies contemplated in the said paragraphs be determined in the manner as set out in the Schedule.
 
Schedule
 
1)   In this schedule, any word or expression to which a meaning has been assigned in the Act, bears that meaning so assigned thereto, and, unless the context otherwise indicates-
"determined value", in relation to a motor vehicle, means- a)   where a motor vehicle, except a motor vehicle
contemplated in paragraph (b)(ii) of this definition was
acquired by a vendor under an agreement o sale or exchange concluded by parties acting at arm's length, the original cost thereof to him, excluding any finance charges, interest, sales tax or value-added tax; or
 
b)   where such motor vehicle-
 
i)    is held by the vendor under a lease; or
 
ii)   was acquired by the vendor under a lease and the ownership thereof was acquired by him on the termination of the lease,
 
the retail market value thereof at the time the vendor first obtained the right of use of t motor vehicle or, where at
such time such lease was a financial lease for the purposes of the Sales Tax Act, 1978 (Act No. 1O3 of 1978), the cash

 
 
 
 

                        

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value thereof as contemplated in paragraph 2 of Schedule
4 to that Act, or, where at such time such lease was an installment credit agreement as contemplated in section 1 of the Act, the cash value thereof as defined in section 1 of the Act reduced the amount of value-added tax; or
 
c)   where such vehicle was acquired otherwise than contemplated in paragraphs (a) or (b), the market value of such motor vehicle at the time when the vendor first obtained the vehicle or right of use thereof:
 
Provided that where an employee has been granted the right of use of such motor vehicle and such vehicle, or the right of use thereof, was acquired by the vendor not less than 12 months before the date on which the employee was granted such right of use, there shall be deducted from the amount so determined under the aforegoing provisions of this definition a depreciation allowance calculated according to the reducing balance
method at a rate of 15 per cent for each completed period of
12 months from the date on which the vendor first obtained such vehicle or the right of use thereof to the date on which the said employee was first granted the right of use thereof; and
 
"the Act" means the Value-Added Tax Act, 1991 (Act No.
89 of 1991).
 
2)
 
a)   For the purposes of the proviso to subsection (8) of section
10 of the Act, the consideration in money for the deemed supply shall be 0,3 per cent of the determined value of the motor vehicle for each month or part thereof calculated as from 1 October 1991.
 
b)   If the method of determination of consideration in money contemplated in subparagraph (a) is used with reference to a motor vehicle, that method of determination of consideration in money shall also be used for the succeeding 11 months in respect of the motor vehicle in

question.
 
3)   For the purposes of the proviso to subsection (13) of section 10 of the Act, the consideration in money for the deemed supply shall be-
 
a)   0,3 per cent of the determined value of the motor vehicle
(for each month or part thereof calculated as from 1
October 1991) where the motor vehicle is a motor car as contemplated in the Act and the vendor was in terms of section 17(2) of the Act not entitled, or would not have been entitled had that section been applicable prior to the commencement date, to deduct the full amount of input tax in terms of section 16(3) of the Act in respect of such motor car when it was supplied to or imported by him; or
 
b)   in a case other than contemplated in paragraph (a) 0,6 per cent of the determined value of the motor vehicle (for each month or part thereof calculated as from 1 October 1991): Provided that where the employee pays a consideration for the right of use of such motor vehicle, the consideration in money determined monthly in terms of this paragraph shall be reduced by the lesser of the consideration paid by the employee or the amount of the consideration in money determined monthly:
Provided that where the employee bears the full cost of repairs and maintenance of the motor vehicle and no compensation in the form of an allowance or
reimbursement is payable by the vendor to the employee in respect of the said cost of the consideration in money so determined monthly shall be reduced by the lesser of-
 
i)    R85; or
 
ii)   the amount of the consideration in money determined monthly:
 
Provided further that the consideration in money calculated in this paragraph, after the application of the

 
 
 
 

                        

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provisos, shall be reduced to the extent that the right to use the motor vehicle is granted by the vendor in the course of making exempt supplies.
 
BJ du Plessis
 
Minister of Finance

GGN 2761 - Export Incentive Scheme in terms of the definition of "exported"
 
Department of Finance
 
No. 2761 - 16 November 1998
 
The Export Incentive Scheme, which was originally published as
General Notice No. 397 of Government Gazette No. 13949 dated
27 April 1992, is hereby withdrawn and replaced by a new Export Incentive Scheme as from 16 November 1998. All rulings issued in terms of the previous Scheme are also withdrawn as from 16
November 1998.
 
A new Export Incentive Scheme, in terms of the provisions of paragraph (d) of the definition of "exported" in section 1 of the Value-Added Tax Act, 1991 (Act No. 89 of 1991), has been approved by the Minister of Finance to come into operation on 16
November 1998 and particulars are hereby announced for general information.
 
P.J. Gordhan
 
Acting Commissioner for The South African Revenue Service
 
Definitions
 
Export Incentive Scheme in terms of Paragraph (d) of the Definition of "exported" in Section 1 of the Value-Added Tax Act, 1991 (Act No. 89 of 1991)
 
For the purposes of The Export Incentive Scheme (The Scheme), any word or expression to which a meaning has been assigned in the Act, bears the meaning so assigned thereto, and, unless the context otherwise indicates-
 
"Commissioner" means the Commissioner for the South African
Revenue Service;
 
"designated commercial port" means a place of exit from the

 
 
 
 

                        

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Republic which has been designated by the Commissioner as an exit point from the Republic (see paragraph 1.4);
 
"export depot" means the premises of a qualifying purchaser's cartage contractor;
 
"qualifying purchaser" means a qualifying purchaser as defined in paragraph 1.1 of The Scheme; and
 
"qualifying purchaser's cartage contractor" means a person who is registered under the Act as a vendor, transport being its main activity, and who has been engaged by the qualifying purchaser for a consideration in money to transport and deliver the movable goods to him at an address in an export country. For the
purposes of The Scheme, qualifying purchaser's cartage contractor includes couriers and freight forwarders;
 
"registrable goods" means goods consisting of any aircraft, ship or other vessel, motor cycle or other vehicle, caravan or trailer in respect of which any form of registration is required under any law in force in the Republic or any similar law in force in an export country;
 
"RSA" means the Republic;
 
"RSA vendor" means a person registered in terms of the Act;
 
"SARS" means the South African Revenue Service;
 
"Standard rate" means tax levied in terms of section 7(1) of the
Act;
 
"tax" means the tax chargeable in terms of the Act;
 
"tax invoice" means a tax invoice as prescribed in section 20 of the Act;
 
"the Act" means the Value-Added Tax Act, 1991 (Act No. 89 of
1991);
 
"VRA" means a VAT refund administrator appointed by the
Commissioner to administer the refund of tax in terms of Part One

of The Scheme;
 
"zero rate" means the rate of tax levied in terms of section 11(1) of the Act.
 
[The above-mentioned definitions are printed in Green Text in The
Scheme.]
 
Introduction
 
One of the principles of the South African VAT system is that VAT at the standard rate is imposed when movable goods are supplied in or imported into the RSA and VAT at the zero rate may be applied by a RSA vendor where movable goods are exported, provided satisfactory proof of export can be furnished.
 
Imports from and exports to countries other than Botswana, Lesotho, Namibia and Swaziland (the BLNS Countries) have been controlled since the introduction of VAT on 30 September 1991. As from 16 November 1998 imports from and exports to the BLNS Countries will also be controlled.
 
The term "exported" as referred to in section 11(1)(a) is defined in the Act in section 1, inter alia, as follows:
 
" 'exported', in relation to any movable goods supplied by any vendor under a sale or instalment credit agreement means-
 
a)   consigned or delivered by the vendor to the recipient at an address in an export country as evidenced by documentary proof acceptable to the Commissioner; or
 
b)   …
 
c)   …
 
d)   removed from the Republic by the recipient for conveyance to an export country, in accordance with the provisions of an export incentive scheme approved by the Minister; ".
 
A distinction must therefore be made between exports as defined

 
 
 
 

                        

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in paragraph (a) and exports as defined in paragraph (d). "Exported" as defined in paragraph (a) can be classified as "direct exports" and "exported" as defined in paragraph (d) as "indirect exports".
 
Direct exports
 
(VAT Practice Note No. 1 of 1998 has been replaced by VAT Practice Note No. 2 of 1998):
 
Where a RSA vendor supplies movable goods and consigns or delivers them to a recipient in an export country he must, in terms of section 11(1)(a) read with paragraph (a) of the definition of "exported" in section 1 of the Act apply the zero rate (see VAT Practice Note No. 2 of 1998). The term "consigned or delivered" is defined in the Practice Note as follows:
 
i)    "Physically delivered by the RSA vendor to the recipient at an address in the export country; or
 
ii)   where the RSA vendor uses a cartage contractor (supplier's cartage contractor) to deliver the goods on his (the RSA vendor's) behalf to the recipient at an address in an export country, only if the supplier's cartage contractor is contractually liable to the RSA vendor to effect delivery of the goods and the RSA vendor is liable for the full cost relating to such delivery. "
 
lndirect exports (The Export lncentive Scheme)
 
Except as provided in Part Two of The Scheme, where the movable goods are delivered to the recipient in the RSA, VAT at the standard rate must be levied as from 16 November 1998, irrespective of whether the movable goods are intended for consumption locally
or in an export country. Where the movable goods are exported through a designated commercial port, facilities are available for the VAT to be refunded to the qualifying purchaser by the VRA, provided the requirements as set out in The Scheme are complied with.

The Export Incentive Scheme, [originally published as General
Notice No. 397 of 1992 (in Government Gazette No. 13949 dated
27 April 1992) and amended by Notices No. 169 of 1993 (published in Government Gazette No. 14593 dated 26 February 1993) and
422 of 1998 (published in Government Gazette No. 18738 dated 11
March 1998)], is now replaced in its entirety by The Scheme.
 
The Scheme
 
i)    The Scheme requires, in Part One, that a supply of movable goods that are not exported by the RSA vendor be taxed at the standard rate and provides for the refund of the tar by the VRA only, at a designated commercial port, provided the requirements as set out in The Scheme are complied with.
 
ii)   The Scheme provides in Part Two for a choice by the RSA
vendor to charge VAT at the zero rate or at the standard rate.
 
iii)  The Scheme also provides guidelines for a qualifying purchaser who exports movable goods to obtain a VAT refund and also
for a REA vendor to furnish purchasers with information in this regard. The Scheme applies to indirect exports of movable goods but does not include services.
 
Services
 
Where movable goods are temporarily admitted into the RSA for purposes of repair or servicing, the movable goods and services supplied in connection therewith may be supplied at the zero rate, provided that the non-resident must obtain a form VAT 262 at the point of entry into the RSA. The non-resident can then approach the RFA vendor from the outset on the strength of the VAT 262
form, duly endorsed by RSA Customs and Excise, and request that the supply be zero-rated. The form VAT 262 must be retained by
the RSA vendor for a period of five years. The provisions relating hereto are contained in section 11(2)(g)(ii) of the Act and do not form Part of The Scheme.

 
 
 
 

                        

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Part One: Procedures for Granting of Refunds of Tax to Qualifying Purchasers Residing in or Conducting Business in Export Countries
 
1.1 Qualifying Purchasers
 
The Scheme applies where movable goods are supplied by a RSA
vendor to a purchaser who is:
 
A Non-Resident: "non-resident" means a person who is a non- RSA passport holder, who is not in the RSA at the time of the supply, who is a permanent resident of an export country and who orders movable goods from the RSA and has such goods exported on his behalf in accordance with the provisions of paragraph 1.3.4; or
 
A Tourist: "tourist" means a person who is a non-RSA passport holder, who travels to the RSA on a non-resident travel document and exports movable goods from the RSA in accordance with the provisions of paragraph 1.3. Such person must be a permanent resident of an export country who is on a temporary visit to the RSA ; or
 
A Foreign Enterprise: "foreign enterprise" means an enterprise or business which is carried on continuously or regularly by any person (including RSA passport holders) in an export country in the course or furtherance of which goods and services are supplied to any other person for a consideration. The foreign enterprise must submit appropriate evidence in the form of a trading Licence as
well as a letter of authorisation from the foreign enterprise authorising the specific person who exports the goods to claim a refund in accordance with the provisions of paragraph 1.3 on behalf of the foreign enterprise; or
 
A Foreign Diplomat: A refund in the case of a foreign diplomat will be considered only where a diplomat who was stationed in South

Africa is departing from the RSA permanently upon conclusion of his/her term of duty and who is exporting the movable goods in accordance with the provisions of paragraph 1.3. The diplomat must be in possession of a letter from the relevant diplomatic or consular mission stating that he/she is departing from the RSA permanently. Refunds will not be considered in respect of registrable good; (e.g. vehicles). If the diplomat is entitled to a refund in respect of registrable goods in terms of section 68 of the Act, the diplomat should lodge the claim via the Protocol section of the Department of Foreign Affairs.
 
The Above-Mentioned Persons are Regarded as "Qualifying
Purchasers" for the Purpose of The Scheme.
 
No refund shall be made to foreign passport holders who have permanent resident status in the RSA. Where a person travels on a permit endorsed "accompanying husband/wife" the refund will depend on the status of the accompanied spouse (e.g. where the spouse has permanent resident status in the RSA, no refund shall be made).
 
1.2 Responsibilities of the RSA Vendor
 
1.2.1    Tax at the standard rate must be charged by the RSA vendor on movable goods supplied to a qualifying purchaser. Such tax must be accounted for in the usual way by the RSA vendor.
 
1.2.2    The RSA vendor must issue a tax invoice, hand the tax invoice to the qualifying purchaser and may advise the purchaser:
 
i)    that the procedures for obtaining a refund on movable goods exported will depend on who exports the goods and which one of the designated commercial ports is used to exit the RSA:
 
a)   if exported by the qualifying purchaser himself via one of the designated commercial ports listed in paragraphs 1.4.1 or 1.4.2, the procedures as

 
 
 
 

                        

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stipulated in paragraphs 1.3.1 and 1.3.2 are applicable; or
 
b)   if exported by the qualifying purchaser himself via one of the designated commercial ports listed in paragraph 1.4.3, the procedures as stipulated in paragraphs 1.3.1 and 1.3.3 are applicable; or
 
c)   if exported by a qualifying purchaser's cartage contractor via any of the designated commercial ports, the procedures as stipulated in paragraphs
2.3.1 and 1.3.4 are applicable; and
 
ii)   that where the movable goods consist of second-band goods and a notional input tax credit was claimed by the RSA vendor or any other person who is a connected person in relation to the RSA vendor when the goods were acquired, the refund (by the VRA) will represent only the amount of tar in excess of the notional input tax claimed. (These principles are contained in the proviso to section 11(1) read with the provisions of section 10(12) of the Act.)
 
1.2.3     The RSA vendor has no further responsibility with regard to the refund to be made by the VRA, other than to furnish information to SARS when called upon to do so.
 
1.3 Responsibilities of the Qualifying Purchaser
 
1.3.1    The qualifying purchaser must ensure that:
 
i)    the movable goods are exported via a designated commercial port (see paragraph 1.4) in accordance with the prescribed RSA Customs and Excise
procedure, which requires that the relevant goods must first be declared at a RSA Customs and Excise Official (herein after referred to as Customs Official) before the VRA is approached for a refund. Customs Officials will be present at all the designated commercial ports; and

ii)   where the movable goods are exported via:
 
a)   one of the ports listed in paragraph 1.4.1 or 1.42 by the qualifying purchaser himself, that the procedures as stipulated in paragraph 1.3.2 are followed; or
 
b)   one of the ports Listed in paragraph 1.4.3 by the qualifying purchaser himself, that the procedures as stipulated in paragraph 1.3.3 are followed; or
 
c)   any of the ports listed in paragraph 1.4 by a qualifying purchaser's cartage contractor that the procedures as stipulated in paragraph 1.3.4 are followed.
 
1.3.1.1 A refund will be considered only where the VAT inclusive total of all purchases exported at one time exceeds R250 per qualifying purchaser
 
1.3.1.2 No tax refund will be made where the qualifying purchaser exports the movable goods in terms of The Scheme after
90 days from the date of the tax invoice.
 
1.3.2  Movable Goods Exported via one of the Ports listed in Paragraphs 1.4.1 or 1.4.2 by the Qualifying Purchaser Himself
 
1.3.2.1 In order to qualify for a lax refund where movable goods are exported via one of the ports listed in paragraphs 1.4.1 or 1.4.2 by the qualifying purchaser himself the qualifying purchaser must, after all the procedures and requirements in paragraph 1.3.1 have been met, present himself to a
VRA Official or a Customs Official (depending whether the VRA is present at the specific designated commercial port), together with the movable goods and the tax invoice. The VRA or appointed Customs Official are situated after immigration control and therefore, (when departing from an airport or harbour) the movable goods and the tax invoices should be kept as part of the hand-luggage and not as part

 
 
 
 

                        

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of the main luggage.
 
Should the movable goods be too large to be kept as hand-luggage and are transported as part of checked luggage, the qualifying purchaser must ensure that the tax invoice in relation to the relevant movable goods is endorsed by the Customs Official to the effect that the relevant movable goods have been inspected by the official prior to the movable goods being checked in as part of the main luggage. This endorsed tax invoice must then be presented to the VRA for a refund or handed in to the Customs Official, depending whether the VRA is present at the specific designated commercial port, before departure.
 
1.3.2.2 A VRA Official or a Customs Official, depending whether the VRA is present at the specific designated commercial port, must examine the movable goods to ensure that they correspond with the description thereof on the tax invoice. Each tax invoice must be endorsed and retained by the official.
 
1.3.2.3 The official will issue a VAT 255 summarising the tax invoices details. This form must be signed by the qualifying purchaser as confirmation of the correctness of the details it contains. A copy of this VAT 255 will be issued to the qualifying purchaser while the original VAT 255 and tax invoices will be retained by the official.
 
1.3.3  Movable Goods Exported via one of the Ports listed in
Paragraph 1.4.3 by the Qualifying Purchaser himself
 
Where movable goods are exported via one of the ports listed in paragraph 1.4.3 by the qualifying purchaser himself, he may, after the procedures and requirements in paragraph 1.3.1 have been met, request the VRA for a refund by submitting a letter (explaining his circumstances and stating his postal address) together with all the documents prescribed in paragraph 1.3.4.1 with the exception of number (iii), which is not required in these

circumstances.
 
No tax refund will be made where:
 
·     the movable goods were exported more than 90 days from the date of the tax invoice; or
 
·     the request for a refund together with all the documentation is received by the VRA later than 3 months after the date of export.
 
1.3.4    Movable Goods Exported by a Qualifying Purchaser's
Cartage Contractor via any of the Ports listed in Paragraph
1.4
 
Where the RSA vendor delivers the movable goods to an export depot, a harbour, an airport, a railway station or a courier service in the RSA, or the qualifying purchaser's cartage contractor takes possession of the movable goods at the premises of the RSA vendor, or the qualifying purchaser or his agent delivers the movable goods to an export depot, from where the movable goods are exported via any of the ports listed in paragraph 1.4 to the qualifying purchaser at an address in an export country, the qualifying purchaser may apply for a refund.
 
After all the procedures and requirements in paragraph
1.3.1 have been met and only after the qualifying purchaser has received the movable goods, can he request the VRA for a refund by submitting a letter (explaining his circumstances and stating his postal address) together
with all the documents prescribed in paragraph 1.3.4.1. No tax refund will be made where:
·     the movable goods were exported more than 90 days from the date of the tax invoice;
 
·     the movable goods were exported via a port other than the designated commercial ports listed in

 
 
 
 

                        

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paragraph 1.4; or
 
·     the request for a refund together with all the documentation is received by the VRA later than 3 months after the date of export.
 
1.3.4.1 Documentation:
 
Where movable goods are exported by a qualifying purchaser's cartage contractor by road, sea, air or rail, the following documentation is required:
 
i)    the original tar invoice;
 
ii)   a copy of the qualifying purchaser's :
 
a)   passport; or
 
b)   trading license, as well as the letter of authorisation and a copy of the authorised person's passport; or
 
c)   passport and the relevant letter as stipulated in paragraph 1.1 under the heading "Foreign diplomats"; and
 
d)   where the qualifying purchaser was in the RSA at the time of purchase, the copy of his passport must include those pages reflecting the following:
 
·     endorsement reflecting entry into the RSA; and
 
·     endorsement reflecting exit from the RSA ;
 
iii)  a copy of the invoice from the qualifying purchaser's cartage contractor to the qualifying purchaser; and
 
iv)  proof that the qualifying purchaser declared the movable goods for customs purposes in the export country;
 
Where the tax invoice is endorsed at one of the ports listed in paragraph 1.4.3, the following documentation

must also be submitted:
 
v)   a copy of the export documentation prescribed under the Customs and Excise Act, 1964 bearing an original RSA Customs and Excise endorsement; and
 
vi)  in the case of export by air: a copy of the airway bill as well as the flight number and the date and place of departure; or
 
in the case of export by sea: a copy of the bill of lading which must contain a full description of the movable goods to be exported. In the case where the movable goods of more than one person are exported in one consignment and only one bill of lading is issued, such bill of lading must be accompanied by an annexure issued by a clearing agent containing a full description of the movable goods supplied by each vendor. This description must specify the quantity or mass, as well as the value of the relevant movable goods; or in the case of export by rail:
 
·     a copy of the freight transit order issued by
Spoornet; and
 
·     a copy of the combined consignment note and invoice issued by Spoornet.
 
1.3.5    In cases where all the above requirements (Paragraph 1.3) are not adhered to, the Refund Claim will be invalid in terms of The Scheme.
 
1.4 Designated Commercial Ports
 
Movable goods must be exported via a designated commercial port. Should none of the designated commercial ports listed below be used, the claim will be invalid and will not be refunded.
 
The export of movable goods as well as the declaration of such goods at ports other than those ports listed below, may be allowed

 
 
 
 

                        

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in exceptional circumstances on application to and after approval by the Controllers of RSA Customs and Excise.
 
1.4.1    Designated commercial ports (VRA not present):
 
·     Harbours: Cape Town; Durban; East London; Port
Elizabeth; Richards Bay; and
 
·     Airport: Lanseria
 
1.4.2    Designated commercial ports (VRA present):
 
·     Border Posts: Belt Bridge; Caledonspoort; Ficksburg Bridge; Golela; Groblers Bridge; Jeppes Reef; Kopfontein; Lebombo; Mahamba; Mananga/Border Gate; Maseru Bridge; Nakop/Narogas; Nerston; Oshoek; Qacha's Nek; Ramatlabama; Skilpadshek; Van Rooyenshek; Vioolsdrift; and
 
·     International Airports: Cape Town; Durban; Johannesburg.
 
1.4.3    Other designated commercial ports (VRA not present):
 
·     Airports: Bloemfontein; Gateway (Pietersburg); Nelspruit; Mmabatho; Port Elizabeth; Upington;
 
·     Harbours: Mossel Bay; Saldanha; and
 
·     Railway Stations: Germiston; Golela; Maseru Bridge; Mafikeng and Upington.
 
1.5 The Refund
 
The refund in terms of section 44(9) of the Act can be effected by the VRA on departure or forwarded to the qualifying purchaser.
 
The refund cheque which will be issued in RSA currency, will be valid world-wide (except in the RSA) for a period of three months from the date of issue: Provided that in the case of Botswana, Lesotho, Namibia or Swaziland the cheques will be valid only in the country of residence of the claimant and in the case of Botswana,

refunds will be in the currency of that country.
 
If all the requirements have been met at the time of departure from one of the designated commercial ports where the VRA is present (see paragraph 1.4.2) a refund limited to an amount as determined by the Commissioner may be paid immediately by the VRA office at that designated commercial port.
 
Where -
 
·     the claim is for a higher value than that as determined by the
Commissioner;
 
·     the VRA has decided that the claim must first be authorised by the Commissioner;
 
·     a claim is handed in to a Customs Official at a designated commercial port where the VR4 is not present;
 
·     the claim is a claim as described in paragraphs 1.3.3 or 1.3.4;
 
·     the claim is in respect of second-hand goods; or
 
·     the claim is in respect of registrable goals,
 
the refund will be forwarded to the qualifying purchaser by the
VRA.
 
The cheque will be issued and forwarded to the address on the VAT
255 or as stated in the qualifying purchaser's letter, only after:
 
·     the Commissioner has approved the claim; or
 
·     the Commissioner has determined the amount refundable in the case of second-hand goods (if the movable goods consist of second-hand goods and a notional input tax credit was claimed by the RSA vendor or any other person who is a connected person in relation to the vendor, when the goods were acquired, the refund will represent only the amount of tar
in excess of the notional input tax claimed. These principles are contained in the proviso to section 11(1) of the Act read with
the provisions of section 10(12) of the Act and must be applied

 
 
 
 

                        

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in these circumstances); or
 
·     proof of registration in the export country concerned (in the form of a copy of the registration certificate, certified by a commissioner of oaths), is submitted to the VRA in the case of registrable goods.
 
1.6 Commission in Respect of Refunds
 
The V1PA will deduct a commission from the tar refundable to the qualifying purchaser to cover the administration costs of The Scheme. In terms of the tender the commission will be calculated at a rate of 1,5 per cent of the VAT inclusive price, with a minimum charge of R1O and a maximum charge of R25O per refund.
Part Two: Procedures for the RSA Vendor who elects to supply Movable Goods at the Zero Rate to a Qualifying Purchaser, where the Movable Goods are initially delivered to a Harbour, an Airport, or are supplied by means of a Pipeline or Electrical Transmission line in the RSA before being Exported
 
2.1        Where the RSA vendor supplies the movable goods to a qualifying purchaser (see paragraph 1.1) and the RSA vendor ensures that the movable goods are delivered (irrespective of the contractual conditions of delivery) to any of the harbours or airports listed in paragraph 1.4 from where the movable goods are to be exported by the qualifying purchaser, the RSA vendor can decide to ten, rate the supply. The decision to supply at the zero rate is entirely subject to the RSA vendor's choice.
 
Where movable goods are exported by means of a pipeline

or electrical transmission line the RSA vendor supplying such goods can decide to zero rate the supply. The decision to supply at the zero rate is entirely subject to the RSA vendor's choice: Provided that he shall obtain, in writing, permission from the Commissioner to apply the zero rate and he shall furnish the Commissioner with such documentary proof of export as stipulated by the Commissioner.
 
2.1.1  Should the RSA vendor decide not to apply the zero rate, the supply is taxable at the standard rate and the qualifying purchaser can, in the case of delivery to a harbour or an airport, apply for a refund according to the procedures as prescribed in paragraph 1.3.4.
 
Where movable goods are exported by means of a pipeline or electrical transmission line and the supply is taxed at the standard rate, the qualifying purchaser can apply for a refund: Provided that he shall furnish the Commissioner with such proof of export as stipulated by the Commissioner.
 
2.1.2    With the decision to supply at the zero rate, the
RSA vendor accepts:
 
i)    the responsibility to ensure that the movable goods have been delivered to any of the harbours or airports listed in paragraph 1.4;
 
ii)   that he is responsible for obtaining the necessary documentary proof (as prescribed according to the Customs and Excise Act,
1964, containing an original endorsement by the RSA Customs and Excise) from the Controller of the RSA Customs and Excise and retaining such documentary proof for a period of five years; and

 
 
 
 

                        

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iii)  that he must comply with the procedures as stipulated in paragraphs 2.2 and 2.3.
 
2.2        The RSA vendor who elects to supply movable goods under the circumstances and provisions described in paragraph 2.1 at the zero rate:
 
2.2.1    must ensure that the zero rate is not applied in respect of supplies of second-hand goods if a notional input tax credit was claimed by the RSA vendor or any other person who is a connected person in relation to the vendor when the goods were acquired. In terms of the proviso to section
11(1) read with the provisions of section 10(12) of the Act, tax is chargeable, to the qualifying purchaser, equal to the notional input tax credit claimed by the RSA vendor. Such VAT shall not be refunded;
 
2.2.2    must furthermore retain and carefully preserve for a period of five years the following:
 
i)    his copy of the zero-rated tax invoice or the tax invoice showing tax equal to the notional input tax credit claimed, as issued by himself;
 
ii)   a copy of the qualifying purchaser's passport or trading license, or of the passport and the relevant letter as stipulated in paragraph 1.1 under the heading "Foreign diplomats";
 
iii)  the qualifying purchaser's order or the contract between himself and the qualifying purchaser; and
 
iv)  proof of payment for the movable goods by the qualifying purchaser.
 
2.3        In the event of all the documentation referred to in paragraph 2.1.2 (ii) and 2.2.2 not having been obtained by

the RSA vendor by the last day of the tax period which ends after the expiry of a period of two months calculated from the date of the relevant tan invoice, the supply will be deemed to be at the standard rate. The RSA vendor must consequently calculate output tax by applying the tax fraction to the consideration (the selling price is deemed to include tax (see section 64(1) of the Act), and include the amount of output tax so calculated in Block 12 of the return for remittance (form VAT 201) rendered for the tax period in which the said period of two months ends.
 
2.3.1    Should the RSA vendor receive the documentation in respect of which output tax was calculated in terms of paragraph 2.3 within one year from the date of the original tar invoice, the amount previously included in Block 12 of form VAT 201 may be claimed as an input tax credit in Block 18, for the tax period in which this documentation is received.
 
2.3.2    Should the RSA vendor experience difficulties in obtaining the required proof of payment, both the periods referred to above in paragraphs 2.3 and
2.3.1 may be extended by the Receiver of Revenue where the RSA vendor is on register, with a maximum period of four months. This is only applicable with regard to the proof-of payment requirement in respect of the movable goods supplied.
 
2.3.3    The rate of tax applicable for purposes of paragraphs 2.3 and 2.3.1 is the rate of tax in force at the date of issue of the tax invoice.

 
 
 
 

                        

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Regulations issued in terms of Section
28(7) of the Value-added Tax Act, 1991, prescribing procedures for submitting returns in electronic format and requirements for electronic signatures
 
SOUTH AFRICAN REVENUE SERVICE No. R. 312 12 March 2004
By virtue of the power vested in me by section 28(7) of the Value- Added Tax Act, 1991 (Act No. 89 of 1991), I , Trevor Andrew
Manuel, Minister of Finance, hereby make the following regulations, as set out in the Schedule hereto, prescribing the procedures for submining a return in electronic format and the requirements for an electronic signature as contemplated in section 28(6).
 
1. Definitions
 
For the purposes of these regulations, unless the context otherwise indicates, any word or expression to which a meaning has been assigned in the Value-Added Tax Act, 4991 , bears the meaning assigned thereto, and-
 
'access code' means the secret series of numeric or alphabetic characters associated with an individual user-ID by the owner or user of the individual user-
 
'availability' means the status where authorised users have access to information and services when required;
 
'disaster recovery' means the process of planning, developing, testing, maintaining and activation of a recovery plan in the information technology environment relating to any natural or other disaster resulting in the loss of resources due to an unforeseen disruption that may result in major business losses;

 
 
 
 

                        

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'e-filing service' means the provision of an internet website and software which is available 24 hours per day, 365 days per year (subject to time required for maintenance or disaster recovery), where vendors and tax practitioners can electronically complete and submit to SARS any returns specified by the Commissioner, and where a vendor or a tax practitioner on behalf of a vendor can make payments to SARS;
 
'integrity' means the status of accuracy and completeness of information, processing methods and computer software;
 
'non-repudiation' means the process of assuring that a sender cannot deny being the source of the message;
 
'SARS' means the South African Revenue Service, established in terms of the South African Revenue Service Act, 1997 (Act No. 34 of 1997); and
 
'user-lD' means the identification provided to a vendor or tax practitioner for utilisation in the sign-on process in order to access the e-filing service.
 
2. Provision of e-filing service
 
For purposes of enabling vendors and tax practitioners to make use of the e-filing service, SARS must-
 
a)   provide an internet based application where vendors and tax practitioners can electronically complete tax returns;
 
b)   provide a data transfer facility, payment facility and a secure and reliable processing environment where SARS and vendor information is preserved, secured and protected against unauthorised access, manipulation and destruction;
 
c)   ensure information security including confidentiality, integrity, availability and non-repudiation;
 
d)   provide a complete database facility to retain a history of returns submitted and payments made by a vendor or tax

practitioner by way of the e-filing service for a period of at least five years;
 
e)   secure information in a method and in a format that ensures the integrity and reliability of the data and ensures that the information can be reproduced when required as permissible evidence in a court of law; and
 
f)    provide call center and helpdesk facilities.
 
3. Registration, submission of electronic return, payments and termination
 
1)   For purposes of registering a vendor or tax practitioner as an electronic filer-
 
a)   that vendor or tax practitioner must-
 
i)    apply for registration as an electronic filer with SARS;
and
 
ii)   accept the conditions of use of the e-filing service;
 
b)   SARS must confirm the e-filing activation if the information supplied is complete and valid, or notify the vendor or tax practitioner to re-submit correct information if any information supplied is incomplete or invalid; and
 
c)   SARS must provide the vendor or tax practitioner with a user-ID and access code after obtaining positive proof of identity of that vendor or tax practitioner.
 
2)   A user-ID and access code contemplated in regulation 3(1)(c)
must be-
 
a)   uniquely linked to the vendor or tax practitioner;
 
b)   capable of identifying that vendor or tax practitioner;
 
c)   capable of being maintained under the sole control of that vendor or tax practitioner; and

 
 
 
 

                        

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d)   based on the identification of the vendor or tax practitioner as contemplated in regulation 3(1)(c).
 
3)   A vendor or tax practitioner may only gain access to the e-filing service by using his or her user-ID and access code.
 
4)   SARS must provide a procedure to be followed-
 
a)   by a vendor or tax practitioner to gain access to information relating to the e-filing service transactions of that vendor or tax practitioner; or
 
b)   if a vendor or tax practitioner wishes to terminate his or her e-filing service.
 
4. Electronic signature
 
1)   When an electronic return submitted by means of the e-filing service is received on the e-filing website, the electronic signature of the vendor or tax practitioner is electronically attached to that return.
 
2)   An electronic signature of a vendor or tax practitioner as contemplated in regulation 4(1) consists of the user-ID of that vendor or tax practitioner together with the date and time that the return was received on the e-filing website.
 
3)   An electronic signature attached to a return as contemplated in regulation 4(1), is deemed to have been attached to that return by the person who submitted that return by way of the e-filing service.



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